Hi there,
Im a 19 year old New Zealander who really wants to get into investments young. (Im also new to the message board)
Saving up for a deposit hasn’t been too easy and I do not have much saved. My question is, would it be wise to get a $30,000 10 year personal loan from a bank in which there is no security needed and I would probably qualify for a 9% interest rate (as opposed to the 14% rate). Fortnightly repayments are small, but it would mean that my first properties are 100% financed by banks and mortgage companies. Is this wise?Tim.
it’ll either be the best or the worst decision you’ll ever make.
good luck. whats wrong with saving and coming back when your 21?
cheers
brahms
Mortgage Broker
[email protected]Hi Tim,
The repayments on a personal loan may effect your serviceability/borrowing capacity on the investment loan,
Consider borrowing the required funds from your parents etc, in conjunction with a 90/10 non genuine savings type loan.Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIAPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
Hi Brahms,
GEMIS or what ever there called this week, also insure in NZ.Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIAPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
And don’t forget that you will have to declare the repayments on the personal loan on your home loan application. This will eat into your serviceability as the repayments will be high due to the higher interest rates and shorter terms on personal loans.
Terryw
Discover Home Loans
Mortgage Broker
[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
Thanks for the replies!
I could save up and come back when i am 21, but I really do want to get into the market and start making my money (and other peoples money) work for me. 2 years is a long time and I’d rather work with the momentum I have now (and the freedom) to get property working for me. I want to be either financially independent or certainly on my way by the time I am 25. This is a big call I realise, and I do not intend to just use property, however I would like to get started with this.
As for borrowing off my parents. That had been our original plan, but unfortunately it does not look possible anymore due to some circumstances for them that have come up. I’ll continue to see about that one though.
I can probably get a 90/10 loan and with a 20-30k personal loan could get a good house or several ok places.
The repayments on the personal loan could probably be covered by rent (less mortgage and expenses), but it would mean that I am making no profit and not (as Steve says in 0-130 properties…) making profit from day one.
Is this worth pursuing as a way to start my way to wealth?
Thanks once again for everyones help.Tim.
You can use Student loans as a deposit (in fact that is how Dolf De Roos started [http://www.dolfderoos.com]).
Rgds.
Lucifer_auAnother point, it is going to be farily difficult to qualify for such a large personal loan.
Terryw
Discover Home Loans
Mortgage Broker
[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 have no idea about Australia, but to my understanding, it is quite easy to get a personal loan in New Zealand. There are 4 or so big banks throughout the country and one in particular does up to $30k unsecured. I checked on one of their calculators on their website and I could easily get a $30k loan. I am on a high salary (NZD$34k/annum) for somebody of my age, but my job is only temporary, which is why I don’t have too much saved and cant rely on that as of jan 2005.
I guess I’ve been blessed with the ability to get along with people and really network which has led me to getting good, high paying jobs well beyond my ability and age (i am working as an accountant straight out of school with zero qualifications in accounting – never even did it in school, but have been trained up for the temporary position!) so without sounding arrogant, I don’t believe I will have a problem getting the loan as I’d easily be able to service the personal loan out of my own pocket if worse came to worst.
As for student loans, Im not a student so I wouldnt qualify for that unfortunately. Plus, the NZ student loan system is terrible and I think I’d be better off just getting a personal loan.
Is there anything else anybody can advise me on the topic? I am wanting as much advice and tips as possible as it is a reasonably big decision for me. Thanks!Those calculators can be deceiving! But Good luck then. Another thing, watch out if you only have a temp job.
Terryw
Discover Home Loans
Mortgage Broker
[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
Thanks Terry. I’ll talk it over some more with my mentors who know me personally as well. Thanks heaps for everyones help! I’ll let you know how I get on.Tim.
Tim,
There are lenders out who do pure asset lending. The LVR (loan to value ratio) they look at is between 65%-75%. The rates can vary from 7.95%-9.5%, but its you your property. Some these are flexible to allow additional repayments to reduce your interest costs.
David Do
[email protected]
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