Hi All,
This is a very exciting day for me.
I have been actively educating myself in terms of real estate investment, and focusing on my investment area.
And finally, on the weekend, I bought my first property.
The property consists of 3 bedrooms, and 2 living rooms, which one of these living rooms can easily be transferable to 4th bedroom by adding a partition.
The property has a great appeal in the street and the location is well sort after by rental market.
I see the opportunities of this property.Yeah, I bought it over the weekend, subject to finance, pest and building inspection.
1 week to finalise pest and building inspection, which all should be finished by Thursday.
3 weeks to finalise the finance.
And 3 months settlement.At this point I need your help.
I have few questions about the financial structure to set up.
I and my partner both qualified for FHOG. I will use mine and she will loose hers, which means that we need to live in this property for 6 months, which is OK.
Planning to stay there for 1 year, then buy another place and rent this one.
I am in this with my partner.
Also, the loan type I am looking for Interest only with offset account.What sort of financial set up should I follow, considering the house will be ppi for a year, but then will be an investment property?
I agree with the loan account you wish.
Depending on your marital status with your partner it may be possible to each claim the FHOG, but you need to be careful. ie if just bf/gf then I suggest buying in one name and then perhaps the other can then buy his/her home seperately.
But of course if you are married or defacto then you just get the one bite.
There is no quick answer to whose name the purchase should be in. it depends on whether the property will be pos or neg geared and whom has the higher or lower income. At this stage I doubt a Trust is necessary although you can check this with your accountant.
I suggest you see your broker ASAP to determine which lender to use and get your applicatiuon submitted.
All the best – and congratulations!
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
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.
We are defacto at the moment. Can she still get her FHOG in this circumstances for another property? I thought she cant.
Our salaries are very similar.
We will put both our name together into the loan.
Set up a meeting with broker tom night.She cannot – defacto = married.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
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 am bit confused with deposit and getting a loan process. Probably it is so simple but, learning as I go due to this is my first property.
House price is $217k
I have $20k in my bank account.And I signed up for %5 ($10800, which I paid $500 of it initially) deposit with the real estate agent.
Want to barrow %90 from the bank.
I have caught up with my broker and he has found a great loan %6.7 comp rate, int only with offset account.
He told me that for borrowing %90 which is $195k, I need a saving history of $20k, which is no probs.Now my confusion is that when I pay %5 to the vendor from my savings account, I won’t have $20k in it to show to the bank. Only $10k left.
Is it correct that any deposit I pay to the vendor will be assumed as savings $$$ by the bank?
Do banks collect the %10 deposit on approval of the loan? or settlement?
Why such a Big Deposit?
The max I pay is $1,000 the Minimum I’ve done is $100?
As Long as Your Savings History is there you should be OK IMO..Plus, you’re both going for the loan..
Deposit doesnt go to the vendor but into the REA Trust account until Settlement by my understanding ;o)
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorIs it correct that any deposit I pay to the vendor will be assumed as savings $$$ by the bank?
yes – as long as you show the paper trail. ie money saved in your account then transferred with a deposit receipt from the solicitors trust fund.
The remaining 10% is adjusted at settlement. You just draw a bank cheque and pass it to your solicitor. He will instruct you accordingly.
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
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.
Originally posted by redwing:Why such a Big Deposit?
The max I pay is $1,000 the Minimum I’ve done is $100?Learning, learning…
[suave2]Building and pest inspaction reports arrived.
Building inspection says the building is in great condition. He found asbestos in eaves though. I dont think this is such a NO NO, as there is a thick layer of paint over it, above height and outside of the property.Inspection report; No active termites or any trace of past termite activities. I have to admit, these exopest guys did a great job. 15 pages report with photos, and suggestions.
They found wood borers only in localised area. It is the lyctid borer. Apparently very common. It says this pest is not considered a significant pest of timber and threatment is not usually required.
I had a chat with the inspector and he said that it is in very small localised area, and the infestation is not active. No need to stress out.Hi All,
I agree with Redwing that in future you should try and negotiate a $1000 deposit with the RE agent/vendor. The 5% or 10% that RE agents ask for is not something that you must provide. It is just what they ask for. This money goes into a trust account and it is released to the vendor upon settlement (with the balance of your payments from the financier). If you get out of the deal during the unconditional period it should be fully refunded to you (unless the contract says any different).
The realestate agent may tell you things such as “If you put a high deposit down the vendor will treat your offer more seriously” If there is a race on for the property you may choose to submit and pay a higher deposit in case the vendor does believe this.
Asbestos is no big deal unless it is broken up or cut with a saw, then the fine (and very dangerous) particles can get inhaled and stuck in your lungs. If you are doing renos that include handling asbestos it is best to get a professional in because there are all sorts of regulations on handling it and disposing of it.
Also be careful of paint particles if you start sanding. Many old oil based paint contains lead and this is another substance that your lungs will not take kindly to.
I have a link on my website that takes you to the FHOG information. Here it is in case you haven’t seen the Governemnt website before
http://www.freepropertyhelp.com.au/page/page/3033198.htm
Good luck with your property investment.Crusher
I’m relatively new this whole posting thing but have learnt over the years not to assume anything, so forgive me if I’ve missed something in your previous posts! (my assumption is that your partner will contribute some funds as well).
My concern for you is in regard to fees, and the funds required at settlement.
Purchase price = $217,000
Fees (gov’t/bank/solicitor = $10,000 (approx and likely to be more)
Total = $227,000Your funds = $20,000
FHOG = $7,000
Loan from Bank = $195,000
Total = $222,000So there is atleast a $5k shortfall. I admit I’m from SA and don’t really know interstate fees but the $10k doesn’t even include mortgage insurance which could be another $2k or so.
I don’t mean to treat anyone like an idiot but if I didn’t know about this stuff myself I would gladly take this advice to avoid an embarassing moment on settlement day (I would hope your broker has alerted you to the fees involved).
Good luck anyway
Mike
[withstupid]As an Aside..in WA for lower priced properties a first Home buyer can get an extra $2k on top of the $7k
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow Calculator
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