Hi guys,
I have found a house for 94k that needs about 8k in repairs, plus costs.
it will be then valued at 135k. I have 25k for costs and deposit so loan will be 80k IO, rent 140pw.
If the work is done before settlement and valuation done also can i borrow the equity 40k and make the loan 120k and use as a deposit again?
Thanks
Robo
Hope this makes sense?I have never come accross this situation before – You can certainly get a reval and top up done three months after settlement.
Be very careful with doing work prior to settlement. If you fail to settle for any reason you will not only lose your funds involved but may also eed to pay to restore it to the originalcondition.
All the best,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Todays Hot Rate
3 year fixed – 6.57%Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi Simon,
Isn’t it common these days to gain early access to a property before settlement. I did it on my last Ip.
My thought was not to arrange finance until after work was done hence a higher valuation?
Thanks
roboIt is pretty hard to convince a valuer that the property has gone up so quickly. That will probably be the hardest part.
You will not be able to access the equity before settlement, but with some banks you could apply for a loan increase immediately after settlement, and get the place revalued and borrow up to 90% of this new value. But there would be extra fees invloved such as loan variation fees, and maybe valuation, LMI, Stamp duty on the increased protion of the loan etc.
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
Robo: It sounds a little risky [skull]
I live in Karratha and for a fee find quality cash positive deals there, email me at [email protected] to join our database
Thanks for the replys,
I am just having a problem with having 25k of my own money in the deal when at best it would be neutral cahflow. Saying that the house is in a 12000 plus North coast town and to find anything even close to neutral in this market is rare probably impossible.
There is a new estate nearby land is 75-80k and building is booming up to 18mths to get a builder.
Robo
ps Scotty where is KarrathaHi guys,
when I first started out on the investment trail, I was given the option of showing the improvements that I wanted to do, in note format – listing my costs, and presenting that to the valuer to be included in his valuation.
To make that a little clearer, the house we wanted to buy we managed to get for arround $15k less than the asking price. But the house was abandoned and needed windows, painting, carpets and the garden needed to be turned from the wasteland it was into a garden.
So we got written quotes for everything we wanted to put into the place and showed them evidence (photos and a letter from our landlord) of the work that my wife and I had done on the house we were renting and asked that the proposed alterations be included in the valuation. The bank supported us (CBA) and, if the house wouldn’t have been so FUBAR’D, we would have gotten the loan for the house and the proposed repairs.This might be an avenue to explore robo!
And Karratha is 242Km east-south-east of Port Hedland!
PS:north WA below to the left of Broome!
Cheers
C@34
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