I want to look at buying an (my first) investment property using the equity in my home but i dont know how much equity i need or where to go for advice. Should i talk to a financial advisor or a bank manager before i do anything else?
karyn
Hi Karyn,
You are better off talkign to a broker who has a good understanding of the needs of a property investor. A bank manager is restricted by his/her lender’s lending policies rather than having the flexibility afforded by having access to a number of different lending institutions.
To give you a rough idea of where you stand – your available equity is determined by 80% of the value of your house – any existing mortgage. Eg $200 (house value) X 80% = $160K – $40K existing mortgage = $120K available equity.
When buying your IP a lender will typically require you to supply 20% of the value of the property + a further 5% for purchasing costs. If you were buying a $200K IP you would require $40K deposit and a further $10K for purchasing costs.
In both cases you can go over the 80% mark if you are prepared to pay lenders or loan mortgage insurance. In which case you could possibly go above 90% depending upon where you live or the IP is located.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Derek is right. Give a broker a call and see where you stand with your figures.
It will be obligation free.
All the best,
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.
Hi Karyn, & welcome to the forum,
If you are fairly new to property investing, then I would suggest you delay organizing your finance with a Mortgage Broker,
Instead, spend some time reading and researching all things P.I,Formulate a plan, what is your investment strategy? What are your long term goals? Then start with the end in mind,
When you have the confidence that knowledge & due diligence provides, you will be in a position to recognize and engage the appropriate team of Brokers, Accountants Agents etc, that can assist in achieving your long term goals.
Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:1800 820 500
VICTORIAPLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
Hi Karyn,
I’d have to agree with Steven. I made the mistake of not starting with a plan and found myself paying excessive interest rates and having 2 properties that I own tied up. This limited my borrowing capacity while at the same time, kept me stuck to paying higher repayments each month than was really necessary (money down the drain!). I think the only dumb question to ask is never asking one. Keep reading the posts, other forum sites, magazines (API, etc.) and you’ll find that you will soon start to glean information that is relevant to your situation. If you start with the end in mind, then that alone will guide you to the questions you need to ask and the answers your bound to receive. All the best!
Kind regards,
Gatsby!
You must be logged in to reply to this topic. If you don't have an account, you can register here.
