Hello,
I admit it, I'm suffering from analysis paralysis – I don't know where to start.
Returning to OZ after 5 years overseas, I have 3 properties, one of which, my former PPOR, is unencumbered. The other 2 are 60 % geared. I'm just about in positive territory with the rental income. I accumulated these through luck rather than good management, to be honest.
I need a new PPOR, as old one is now too small with addition of son to family. But the choices are too many – sell old PPOR and get something bigger? Will need a mortgage of about $300K – $400K, and not tax effective. Sign a long lease on an appropriate family house and invest?
With a gross salary of $150,000+, will need to do something to maximise position, but not sure how much banks will lend.
If my gross property is $1.8 million, and current loans of $780K, what could I potentially borrow?Thanks in advance for any suggestions
Swampy30
Hi Swampy30,
You have a good problem to have… A lot of available equity and good income, what to do?
Firstly, what you can borrow depends on what disposable income you have left after all existing financial obligations and living costs. This has nothing to do with the value of properties at all.
The solution is to visit with a lender and ask for a pre-approval. If, for example, you get a pre-approval for $450,000 then you know that you are in the market for a property in the $400K range (you need to leave some cash in the pot to pay for stamp duty and other expense). This will require cross-security against another property as there is no such thing as stand-alone 110% home loan.
A decent family house within 15km of capital cities in Australia for $400K is hard to find — unless you’re in Tasmania or South Australia. So if your priority is to house your young family in a nice family home, you will need to sell at least one of your existing properties to make up the funding shortfall.
One the other hand, if you can find one for $400K, then by all means keep all, especially if you are reasonably comfortable with the repayments.
With respect to being in the cash positive territory, this is not a problem at all. It would be more of a problem if you are in the negative.
Angel
Swampy30 – with $150k income …and positive geared rental places- you shouldn’t have any problem with borrowing ..BUT to know how much..we really need to know a LOT more details then the above ahha
So i say- either go to the bank and speak to the lending manger or have a chat with an broker. ..their both free so why not?. But i will add that brokers can help you with loan structure and choosing the right product/lender– compared to the banks lending manger who will ONLY recommend their product even if it’s not suitable.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
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