Sorry for posting a question that has probably been asked a 1000 times before. But I was wondering if I have enough equity to start investing. I have seen the market make adjustments in the last year or two and figure now is a good time to buy.
My situation
PPOR value $330,00 owe $219,000
My income 100,000
wife 10,000-20,000
Question: Is this enough to start investing with and how much do you think a bank would lend us.
Thanks
DarenHi Daren,
I couldn’t really tell without doing a full needs analysis, but simply based on your data included you would have no problem qualifying for 300k and probably alot more. Of course each lender has a different capacity they will lend to you, but you are in quite a strong position. Other factors to consider:
Cost of future property will determine LMI consideration and their policies and guidlines, which have tighter guidlines on:
Employment
Postcode
etc etc…
But as i said based on your snapshot, you’re in a good position to choose the right lender moving forward.Regards
Colin Kidd
Loan Saver Network
http://www.loansaver.com.aulsn | Loan Saver Network
https://loansaver.com.au
Email Me | Phone MeEveryone Deserves a Fresh Start!
wow thanks for that posative feed back. Now at least I should be able to approace a lender with a general idea of what I am able to do. Only problem now is trying to find a property in that price range.
Just keep in mind… i did not provide a full needs analysis and it might unveil unforeseen issues. Don’t take what i said as a full approval or indication of such… this can only be provided once a full loan application is submitted, and LMI has looked over the deal…. be aware, some lenders use an indicative as a means of removing you from the market ie stop you from approaching other lenders
You should use a broker to assess your full needs… I’m not trying to drum business as i only operate from Vic.
Regards
Colin Kidd
Loan Saver Network
http://www.loansaver.com.aulsn | Loan Saver Network
https://loansaver.com.au
Email Me | Phone MeEveryone Deserves a Fresh Start!
Hi Daren
There are basically 2 limits to how much you can borrow – your serviceability and how much deposit you have.
Please note the following is not advice, just some play with numbers. You will need to have your broker verify the numbers as they depend very heavily on which state you are from (I have used NSW for these numbers) as to how much transfer SD you are up for. Also, the rest of your financial position has not been taken into account so these are only a very rough guide.
So, your first step should be to find a broker or mortgage originator and have your financial position analysed before you start looking for a property.
In your case, unless you have additional funds, your limit is going to be how much deposit you can achieve from the equity in your home. Increasing the loan to 80% LVR (generally the limit where LMI is not payable by you) would give you about $45K for deposit and closing costs. Again, using 80% LVR for the purchase, this would allow you to buy up to $180K. So, to purchase more, we are looking at a higher LVR. At 90% LVR, you are looking at a purchase around $275K.
Increasing the loan on your home to 90% and using 90% LVR on the purchase, then you would have around $70K for deposit and closing costs which translates into a purchase a little over $400K.
Hope that helps.
Mum.
Darren
With the income you are on be sure that your broker not only structures the loan correctly to maximise your interest savings but also makes suggestion on how to purchase the new IP.
You really should be looking at knocking down that debt as quickly as possible and there are several ways to do this on your income.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner.
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Originally posted by Qlds007:Darren
You really should be looking at knocking down that debt as quickly as possible and there are several ways to do this on your income.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner.
Ph: 07 3720 1888
[email protected]I know that richard means you should knock down your current home loan as fast as possible. Making the new loan IO will help there. Then direct both sets of principal repayments into the non deductible home loan!
The only exception will be if you plan on upgrading your home and using the current one as an IP. In this case make all loans IO and save your principla payments in an offset account. Under no circumstances consider redraw !
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.
Hi Simon,
Can you exlain to me what is so bad about using redraw?
do you mean redraw on a interest only loan,i can see your point if so.Cheers
Originally posted by flash:Hi Simon,
Can you exlain to me what is so bad about using redraw?
do you mean redraw on a interest only loan,i can see your point if so.Cheers
Sure mate.
When you borrow money it is deemed to be deductible if you buy income producing assets.
When you pay money into a loan is is a repayment. If you redraw that money it is seen as a new loan.
So if you make your PPOR an IP and REDRAW funds to buy another home this these redrawn funds are seen as a new loan and a non deductible one too.
Using offset gives you far more flexibility with no disadvantages.
Hope that helps
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.
Wow
Quite a few interesting comments. Some information I never would have considered either. I have been doing a bit of research but it appears I will have to do quite a bit more so that I can broker the best deal for me and not the bank.
Thank you everyone for the comments.Originally posted by blade:Wow
Quite a few interesting comments. Some information I never would have considered either. I have been doing a bit of research but it appears I will have to do quite a bit more so that I can broker the best deal for me and not the bank.
Thank you everyone for the comments.Ask some of your investor friends or family for the name of their broker. Sit down with him for a while. By all means do your research so you understand his ideas but don’t waste too much time when you have so many experts at your disposal. A good broker will bring a lot of experience to your team and there will not a any cost to you.
A bad one will waste your time at the very least so seek the referrals from those you trust. Unfortunately our industry is full of cowboys although they are dwindling now the easy money times of the last boom are gone[biggrin]
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.
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