Hello I am new to this so hope I am doing it correctly.
I would appreciate any suggestions regarding the dilema I face here goes…….
My husband and I moved from Brisbane to Melbourne 2 years ago. We have a house in the bayside suburbs of Brisbane which was our Principle place of residence for 5 years. It is now rented out but the rent does not cover the mortgage we have to pay about $200 p/m ourselves.
We bought a house down here in Melbourne which my father has come in with us and so now we have a mortgage over his property aswell..
(Not happy about this as mortgage broker did not explain this correctly and was not until we went to a solicitor to get settlement that we found this out.) Anyway we have been here since 1st June 2006 and are struggling to pay the mortgage as my husband is self employed and has had a career change so business is a little slow. We got a mortgage on this house with a No doc loan so interest rates are a little higher. .[angry2]
We are currently painting and doing minor renos to add value as we need to move closer to my husbands work. (It currently takes him 1hour 10min to get to work and we have 2 small children I am going insane at home on my own.)
Do we sell this house and make about $20-30k the prices have certainly gone up here? or do we rent it out but the rent would not cover the mortgage repayments? We have it as an IO loan. The house in Brisbane is also IO and we have borrowed the max on that place….
I do hope someone can help or any recommendations on a mortgage broker in Melbourne Eastern Suburbs.
Thank youSorry no-one has responded by now Anzac.
I’ll have a go, but without more figures it’s a bit hard to really say.
Anyway, based on your post, it sounds as though you are struggling to make ends meet? Been there done that many times – asset rich, cash poor they call it.Options-
1. Both get part-time work; you could maybe take on extra baby-sitting work seeing as how you are stuck at home. My mum did this for many years. (hard yards there, but ya gotta do what ya gotta do).
2. Sell QLD (only if you are getting really tight).
3. As above for Melb.
4. After either 2 or 3, find somewhere close to Hubby’s work to rent for a while until things improve.
5. Keep both houses, really suck it up hard and do it tough – spend nothing for a year (you’re probably doing that now?)There are 3 mortgage brokers on this site who I know of – Terry, Richard, Simon. Maybe they can help.
I don’t think moving out and renting Melb will help you as the neg cashflow will make your situation worse.
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
Hi Anzac
It can be costly to sell a property. Did you take into account the fees (agents, solicitor, loan exit fees – these will be high on a no doc). Plus your father may have to pay CGT and you may too, if you are classing Brisbane as your main residence. But the CGT should be minimal if there is only a small gain.
But if you are struggling to pay these existing mortgages, then you may not be able to afford to buy another.
Terryw
Discover Home Loans
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Hi Anzac15,
My suggestions:
1. Keep the property in QLD. It was your PPOR earlier and you moved to Melbourne only 2 years back. You could keep that property as PPOR for another 4 years and therefore be exempt from CGT on it. You should look at ways of turning the out of pocket $200 p/m payment into cashflow neutral or positive situation. Make sure the rent you are getting is at market level, look at adding some value (through minor renovations) and increasing the rent, etc.
2. Sell the house in Melbourne. That way you clear the risk of cross-collateralising your father’s property. You mentioned the travel time for your husband. Look for a rental property that suits your husband’s work. You also mentioned you will make $20-30k by selling the house in Melbourne. You could put the profit from sale (after sales expenses, etc.) into your Qld property loan and that will help eliminate part of the $200 p/m dent.
3. Do a part time job to help improve your immediate cashflow situation.
Hope this helps and good luck.“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
Thank you all very much for your responses.
There were some great responses of things I hadn’t even considered like: The expense of selling the Melbourne house i hadn’t even thought about the fees as I have never sold a property before. The idea of putting up the rent at the Brisbane property, we have great tennants but they have been paying the same amount for 2 years now so I think it is time for an increase especially with rate rises so I will get on to that straight away. I have been selling a few things on ebay to make some extra money so that has sure helped.I need to keep the big picture in mind as well, of accumulating property for our retirement/super and not just making quick cash. I am sure a lot of you have done it tough to start with but it is worth it now you have many properties under your belt.
I have had an email from Simon so I am hoping to speak to him soon and maybe he can help us out..
Once again thank you all so much you have really opened my eyes to new ideas and given me some hope.
Regards Anzac15
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