Hi,
In three months I will be moving from the NT to Adelaide. I will be leaving two IP’s behind. One has about 45% equity, the other which I am currently living in has around 25% equity.
I was looking to refinance the first IP back to around the 20-25% equity mark to allow myself to buy a principal residence in Adelaide. I really don’t want to rent. I can stay with family for upto 3 months, however with a new baby I don’t want to add additional pressure by overstaying our welcome.
Employment will be new but solid and above average income.
I also have a good solid savings history. Both existing loans are with one bank.
What would be the best way for me to achieve my goal?One a year is my plan!!
Well if you have enough equity to cover a 20% deposit and sufficient income then it will be easy.
Keep in mind that any money you draw from an IP loan for a PPOR will be non deductible debt.
Cheers
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
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.
I have some savings, however I figure once I relocate I will have enough funds to cover any fees that will be incurred when buying a property. As for the deposit I will have around 18 – 20000 dollars. PPOR will be priced from 160 – 200k depending on where I buy or whether I buy a unit or a house.
More thoughts or suggestions………One a year is my plan!!
P.s. Could a Financial Institution look for the additional security of a Garantor in this situation?
Is it easy or hard to refinace an existing IP property to utilise cash equity?One a year is my plan!!
Banks like Garantors but in the end you won’t be rejected because you didn’t have one. Rather it will be LVR as well as income level.
Due to the short history of your employment in SA, you might be required to come up with a higher deposit (perhaps a broker can help…).
Rgds.
Lucifer_auI went and saw my broker this afternoon. He was very helpful and in some ways made it seem to easy. He straightened out my thinking in several ways. Firstly he claims that Garantors are no longer the done thing. Apparenlty the banks just aren’t into them anymore. ??? Next he said I should buy before I go. Set it up as an investment property and then just move in when it suits.
Now this is where I wonder if his theory comes unstuck. We used the sum of $200 000 plus 10k for the usual expenses. So 210k secured (or version of) against another IP that I have. It’s value is 90k, I owe 50k. So I woould have 2 IP’s worth 290k and owe 260k. This equates to 10% equity. Here’s the big question, is it enough equity? I would have thought the bank would be looking for a solid 20%…..Next thing……. He also said that I shouldn’t be afraid to get down there and rent for 6 months or so. He said that’s what he would do in my situation. If I’m able to achieve my objective of buying a home in the city I move to I’m not sure why I should pay rent….. Ideas and thoughts would be appreciated.
Thanks.One a year is my plan!!
“Firstly he claims that Garantors are no longer the done thing. Apparenlty the banks just aren’t into them anymore.”
>This is true. Banks don’t want the bad publicity of trying to take a Garantors house or other assets. banks will accept them (gladly), but it makes little difference if your loan is approved or not (unless the Garantor is kerry Packer…).
I’m sorry but I’m way too tired to start playing ewwith maths at the moment…
Rgds.
Lucifer_auI think I may have found a flaw or two in my brokers plan. All in all it sounds good. However, if I could physically take the required amount of equity from the IP property and use it to lessen the loan amount I will still be borrowing the same amount of money. But, my weekly/monthly commitment on my PPOR will be higher which will give me less interest tax deductions and more money to find each week from wages. Anyone out there like to help me on this one?
One a year is my plan!!
Hey Guys, still need help on this….
Thanks.
One a year is my plan!!
Turismo,
Can’t quite see what you are after.
Not too sure what your broker is trying to achieve here. Not the advice I would give but I might be wrong.
Can you give me a quick call and I will ask a couple of questions?
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
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.
It should make a difference on deductibility of interest if you go as your broker suggested (If I have read you posts correctly). As Simon said, if you withdraw equity from you IP, you won’t be able to claim this extra interest as it is for domestic purposes.
It may be a good idea to rent for 6 months anyway. Since your from out of town, it would be good to get to know the area.
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
Possibly true Terry. I have lived in Adelaide before so I do have a ‘feel’ for it. Some good properties are available now too.
One a year is my plan!!
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