I’m a little bit confused as to what I should do. My wife and I purchased a 3 b/r house on a 925sq.m block, 2 years ago. The house was bought at $125,000 – currently owing $110K. Recently GE Finance valued it at $190K. It was totally renovated before we bought it.
We’re tempted to either refinance and upsize to a larger house or sell all together.
If we refinance we would have $58K as GE would lend 90% of the value of the home. I do know that not all of the $58K would be available as a deposit due to other costs of buying a house ie, stamp duty etc.
If we sell, we might be able to sell for $200K leaving us with about $80K to use as a deposit.
I’d love to go down the path of financial freedom but I guess I need to be coached.
Do I upsize to a larger home or use the refinanced money to buy investment property? Renting the house will result in a negative cashflow outcome. Do I sell all together, buy an investment property and rent a larger place?
What would you do in my situation?
I don’t know your situation, but if you are in a high income earner then I think you should keep this property. You can up size by buy the new PPOR and rent the current one out.
Warm Regards
ChanDollars
[Keep going, you’re on your way to Frolic Freedom!]hi
There are also tax considerations. It may be better to put down a larger deposit on your home as this will reduce you non deductible interest.
Is there any particular reason you are looking at GE?
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I’m looking at GE because I’m self employed and they will lend 90% of the value of the home. Although their interest rate is through the roof 10.65%. Hence, lo doc!
Ahmed Salhien
Ahmed 10%! You gotta be kidding me!
Maybe you need to settle for a 80% lend with a much lower rate, or talk to Terry and see what he can do for you. there are other lenders out there that must have better rates on a 90% lend.
Not sure of your location. Perhaps you could refinance at a LOWER rate, have the house as an IP, and rent for a little (or a long) while, to see if you’re happy to rent etc. etc.?
If you’re looking for financial freedom you’re not really going to find it by buying bigger and better PPORs for yourself.[
]Cheers
MelHi Ahmed (and Mel)
I suspected this was the case. Actually there are not many lenders that will go to 90% LVR on low doc loans. GE is one of the very few.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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