Hey everyone!
My question, as you probably already know is: how much can I borrow?
I’m looking at purchasing my first property which will be an investment property as I am still living with the parentals.
I am currently a second year electrical apprentice earning $764.00 per/fortnight!!!!!!!!! (Not a lot I know)
However my parents are willing/able to gift me $100,000.00 as a deposit + act as a guarantor.
My expenses are next to nothing $250 per/fortnight.
I would LIKE to think I could be looking at houses in Adelaide for $300k – $350k.
Is this realistic? I’m thinking with a sizable deposit + the guarantor, I’m hoping they will take me seriously!
Your thoughts would be appreciated!
Cheersregardless of whether or not they give you a loan i think you are looking at a high price guide. If you were to purchase a $350k place use the 100k deposit and get $300 a week for rent you would have to put in $100 out of your pocket + other expenses such as council, water, insurance which is lets say another $100 a fortnight, doesnt sound like much but reconsider if interest rates go up by 1% or 2%.
i made the mistake when i bought my first property and struggled for 4 years, until things got to normal. I would recommend looking at a cheaper place, building equity and having a look at another place in a couple of yearspashabulker1 wrote:Hey everyone! My question, as you probably already know is: how much can I borrow? I'm looking at purchasing my first property which will be an investment property as I am still living with the parentals. I am currently a second year electrical apprentice earning $764.00 per/fortnight!!!!!!!!!So $19864 per year is that before TAX? – or $17000 p/a then you need to remove about 6% for superannuation lets say $1000 so about $16,000 per year now $250 (your expenses) a fortnight brings it down to $9500 p/a.
So a 300k property minus $100,000 = $200,000 loan plus stamp duty !
$200,000 loan over twenty years at 6% interest (can you afford a higher interest rate it may go up !)
annual loan repayment of $17194
Based on a rental yield of 4% on $300,000 is about $12,000 minus say $2000 for expenses probably have about $10,000
So total cash is $9500 + !0,000 = 19500
Banks may take part of the expected rent as income.
You need to ask a bank if they will lend to you.
Present the prospective lender or mortgage broker with the exact figures you will have to research what the council rates are and what the water rates are and what the land lords insurance would be for the expenses part of the working out
You may find out also what the current rental amount a similar property rents for in the same location to get an idea of the most likely yield.
The lender should be able to also tell you how much the stamp duty will be!pashabulker1 wrote:(Not a lot I know) However my parents are willing/able to gift me $100,000.00 as a deposit + act as a guarantor. My expenses are next to nothing $250 per/fortnight. I would LIKE to think I could be looking at houses in Adelaide for $300k – $350k. Is this realistic?
It really depends on the lender as each lender is different on how they treat rental income but do not forget that your income will increase each year. Do not just rock up without a cash flow projection as the most important thing a bank also wants to know is if you can pay the interest on the loan. You may also look into an interest only loan as another possible loan type.
Certainly from a pure servicing perspective with 100K clear deposit and assumed rent on the IP you would be able to service the loan without your parents standing as Guarantor.
Ideally this is the prefered way to go as Guarantors can messy as far as your parents are concerned.
Richard Taylor | Australia's leading private lender
You may also need to investigate limited liability loans do a search as it has been mentioned before in this forum,
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