Hi all
I hope you incredibly knowledgeable people will be tolerant of my absolute lack of knowledge and forgive any stupid questions!!
My partner and I are really at the basics. We have just been clearing the debts from previous relationships etc (a little way still to go) and now want to get started generating some wealth.
We both (him especially) are interested in property but are worried about how long it will take us to save a deposit (we are hardly spring chickens!), especially while we are still paying off some debt.
He has owned property previously so the FHOG is out. How can we get started quickly? Any ideas would be most gratefully received.
Oldchick,
Welcome! I’m sure you’ll get quite a few replies to your question so I might start the ball rolling with my humble 2c…
You’re doing the right thing and clearing your debts is the obvious way to get started. Get yourself bad debt free and then use that spare cash flow to build a little deposit. This will help with your borrowing capacity.
REI is a great way to build wealth, so your partner is on to something here. But its not as easy as it may seem at first glance. There’s a lot of pitfalls for the uneducated and imptuous. While you’re clearing your debts you should start reading up on the topic. Spread your reading across +ve CF and -ve CF so you get both sides of the coin. Then you can decide which approach suits you best. Steve for +ve CF is the obvious choice, and maybe Peter Spann for -ve.
Of course, check back here regularly and read all of the threads…
If you want some specific information then you’ll need to post some more specific stuff about your current situation. ie. How much bad debt do you have? How much is your combined income? What is your current thinking on what you’d like to buy first off? How much equity do you require and by when? etc.
With this sort of info, you’re bound to get more specific responses on how to get there.
Cheers,
Michael.Spot on Mike,
Ms Oldchick (hehehe) get yourself educated on funky formulae like DSR (Debt Service Ratio), LVR (Loan to Value Ratio) as these are the calculations that banks use to assess your elegibility for loans and the amount of $$ you may be able to borrow.In short DSR: is 35% (varies according to the different lenders) of your wage (for lending) + 70% potential or current rental income (also varies according to the different lenders). The rest of the income is allocated to living and repair costs. This tells them that you can continue to live (without struggeling) while being able to pay off the mortgage!
LVR: is the % difference between the loan amount and the actrual value of the properties (including potential properties that you want to buy). Include credit card and other loans inthis! Anything over 85-90% and you’ll be up for mortgage insurance (additional and sometimes unecessary costs). Some banks allow you to go higher, but most are happiest if you are lower (redues their risk exposure).These will allow you to be better prepared when looking at investing. Gives you an indication of where you are at and roughly how much you could borrow (stops you from applying to buy the Taj-mahal when you can only afford the local out-house!).
I hope these help you to get started, and should give you a better understanding of where you are at and what you need to do to proceed.
Cheers
C@34
Hi! At first glance of your post I thought you could still get the FHOG in your name even if your partner has had property before, but now I’m not 100% certain
Anyone?Sorry to rain on the parade but I’m quite sure Ms Oldchick will not qualify for the FHOG. I say this because back in 1991 I bought a house that I shared with Mr Wrong for only a couple of weeks. That was enough to make sure that Mr Right and I now miss out on the FHOG even though he had never owned any real estate before. No use weeping, just find a way to keep moving forward. Heaps of people get the FHOG and never get as far as we have (and that’s not far at all… yet).
Ms Oldchick you are on the right wavelength, you need to find a slightly different or off-centre approach in order to fast track your investing career (as do we all). Clear your debt if you can do nothing else. Consider this a compulsory learning period. Keep on reading and posting here. Also consider books, seminars etc. Talk to a good mortgage broker (or a couple of them until you find one that understands your needs) and sort out exactly where you stand regarding finance. Your broker will also tell you what you need to do to help your future finance applications. Michael is right, more specific questions will give you more specific answers.
I have no doubt that you can achieve great things in a short time with property investing. The Mappers (see Steve’s new book) achieved amazing results in only one year. Best of luck to you.
Regards,
SonjaIan, it depends on when oldchick’s partner owned the property and the purpose of it. If it was before 1 July 2000, there is no hope of getting it in either name regardless of use unless done fraudulently and we wouldn’t want that.
Robert Bou-Hamdan
Mortgage Adviser
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Comments made are of a general nature and should not be construed as individual advice.
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Anyone?
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