Hi all,
I have just came across this site through google. I’m currently studying a property valuation course to start my life/career in the property industry.
At this stage I’m planning on purchasing a house, however the bank will only lend $260,000 if i plan to live in it. However if its an investment property its $480,000. Heres the thing, I have quite a fair bit of money for a deposit. So i was thinking on purchasing a house say $550,000 as an investment property then few weeks later change it so I can live in the property through the solictor. I would like any feedback on this? If this is possible to do as I definately can make the repayments, just that what the bank lends me at this stage to purchase a house i wish to live in is quite low.Any feedback will be appericated, as I would like to view my options before I buy my first property.
Regards.
P.S Sorry for the long first post. [
]Hi Kenshin,
Please explain why the bank would only lend
$ 260,000 as a house ofr your personal use and lend $ 480,000 as an investment.You mention the words : “to start my life/career in the property industry.”
If you are thinking of a career in real estate (as a valuer or whatever) why would you study (presumably) obscure course instead of doing so at the regular places (like for example – if you live in Sydney – The university of Western Sydney ?
I don’t think anyone would give a fig if you were to change your mind about the property and decided to live in what originally was meant to be an investment property PROVIDED the payments are made as they fall due.
Pisces133
Please explain why the bank would only lend
$ 260,000 as a house ofr your personal use and lend $ 480,000 as an investment.They would lend more for an investment property since there is income from my salary and the rent income from my house being leased.
You mention the words : “to start my life/career in the property industry.”If you are thinking of a career in real estate (as a valuer or whatever) why would you study (presumably) obscure course instead of doing so at the regular places (like for example – if you live in Sydney – The university of Western Sydney ?
I’m working full time and have found a diploma I can do correspondance through TAFE (OTEN).
Where were you thinking I was studying?Thanks for your feedback PeterM, though I feel like you have flamed me.. [?]
G’day Kenshin…
You didn’t deserve that sort of a welcome. Are you having a bad day PeterM?
Hang around Kenshin there are a few helpful guys/gals on this Forum. We rarely agree so you are bound to get a range of ideas.
Have you considered setting up a trust? Then you are your own tenant, with a $480k mortgage. Obviously get legal advice etc.
Thought of using a Broker… you get a cross section of potential lenders with the one application. All lenders vary in lending amounts.
A few helpful Mortgage People here for you to pick their brain.Have you considered that the market may be at a peak? Would it not be better to give it 6 months at least to see how 2004 treats the R/E market?
Don’t worry about your post….. that is a short one compared to some of the answers I hope you’ll get.
Stick around…
Cheers
Bill
Bill O’Mara
Real Estate,Mortgages, Option Writing & Forex. [email protected]Hi Kenshin, [
] I sure misread your post. I thought the post said that you had dug up some course on the internet. On re-reading your post I see now that isn’t the case at all.I am sure Tafe is fine.
I am sure however that many would find it interesting to see the figures you used.
(That is, your salary income, deposit and loan amount in each instance, the envisaged rent on a property worth $ 550,000 and the interest rate used for calculations.)
Also, the bank appears to think that you can only comfortably service a $ 260,000 loan.
If you now, instead, buy a $ 550,000 house and it will not produce any rental income (as you will go and live in it) and your salary remains the same it appears as if you may have problems servicing the higher loan !?BTW BIll, I NEVER have a bad day. [
]Cheers,
Pisces133
G’day Peter…
It just came across as if you might have.
No harm done. Peace?
Cheers
Bill
Bill O’Mara
Real Estate,Mortgages, Option Writing & Forex. [email protected]Of course Bill.
It looks like you are a nightowl like me.
Cheers,
Pisces133
G’day Peter…
I sure am mate….
Tell you a quick story…
In 1969 I was in Vietnam courtesy of the “lottery” I won…. I spent 80% of my tour of duty as a forward scout… scrub bashing on Operations.
We usually split sentry duty.. 2 hours each… trouble was if I copped the 2:00am shift.. I’d been awake anyway… buggered the next day.
Fixed that… I did all shifts until I’d had enough… then woke the next guy to man the M60 machine gun… I got 4-5 hrs sleep and the other guys did 1/2 what they would normally hsve to do.
Then in the 80’s I traded the US Mkts 10:00pm until 6:00 am……… nothings changed… my body clock is right… the rest of the world is a**e about…
Cheers
Bill O’Mara
Real Estate,Mortgages, Option Writing & Forex. [email protected]Was wondering what the story was Bill. Saw you have been getting a fair rap in the forum recently so have been following your posts a bit and was starting to wonder whether you were allergic to sleep or something. You seem to post very late at night. I am two hours later here in japan so I can keep up but it did catch my attention a bit. Wasnt even a twinkle in my parent’s eye in 1969 so cant really comment on where your habit originated from but is an interesting story.
Kenshin,
Just to answer your original question. You don’t need to do anything to change the property from Ip to PPOR.
You own it and you decide who lives in it. There is no need for a solicitor. The banks lend different amounts depending on your intention and as long as you make the payments then you have no problem if your intention changes.
Hope this helps,
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Thanks guys for all your feedback and suggestions. I hope to become a regular poster and plan to review all the old archieves as I’m studying in the property field and want to learn as much as I can about it for knowledge and financial benefits.
Today I talked to a mortgage broker (friend’s relative) he advised me it wasnt an issue if you decided to live in it, he gave me the figures and I’m quite happy with purchasing a house at this stage. However I would like to see how the market is as Billfromoz suggested, but how can one decide when it is the right time to buy?. Chances are the prices will still rise if not much but slightly? I would have money in the bank thats just dead money.. interest wont be the same as the gains from a house if it was to rise. Also leaves the issue in the area to purchase, I’m from the Fairfield area and not even sure where to start looking. I’ll just will have to research and check out heaps of properties to get the feel of the market b4 i decide anything and hopefully someone can point me to the right direction[
]. As you can tell im a Noob to this industry and have a lot to learn. Though I hope to give it back somehow one day . [] Thanks for your time reading this.P.S anyone have any ideas on a good bank to get a loan from.. I’m thinking St george, NAB or ING.. they have good rates and are substainable companies.
Dear KenShin,
Geez. it’s so strange, u know what, my youngest brother’s Ken Shin too.. and for a glance, i thought u were him until i read ur post, definitely not him after that LOL, thougt i would love to have a brother who’s interested in property to share experiences with
he’s 16 this year.. maybe i should influnce him a bit lolAnyway, i think Bill is right to mention looking at the property market in the next few months and see how it’s going. however depending on where u plan to buy, gains may differs too, so it’s not a strict one for all rule.
Have u tried other banks to see if they would lend more? my experience with banks is u have to be patience and look for the best deal and one of them is sure to meet ur requirements and more than happy to have u as their client. Bill, not sure if i’ve mentioned to you but i’ve manage to get the loan from Bankwest and there is no monthly account fees too, compared to ANZ of 8 bucks/month. And the interest’s marginally lower to, it’s at 6.20 at the moment, about 0.05 lower than ANZ
I’m a happy boi. I’m on variable as i think i would love the flexibility to pay it off in lum sum perhaps in a year or two.Cheers,
Kev
]
] I sure misread your post. I thought the post said that you had dug up some course on the internet. On re-reading your post I see now that isn’t the case at all.
]
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