Hi everyone
Learning loads from the forum didnt realise I was a property investo untill I came across all this information that can be overwhelming. Firstly I have learnt that you should have a property strategy I am unsure what mine is maybe some one can give me advice about that and where to from here.
My PPOR is valued at 360K I owe 220K I have split the loan half fixed. I recently purchased a property in mildura VIC FOR 230k using my PPOR equity as my deposit so I owe 230K the property rents for $280 week and I have interest only loan.
We have a combined income of about 180K no other debt.
We have no savings as we travel overseas with any money saved and we pay extra payments on our PPOR.
I would like to buy a third property what would be the best way to go around it do I have enough equity and what is my strategy?thanks jodie
Hi Jodie
Welcome to the forum.
Couldn’t you tap into the equity in your PPOR again to purchase the 3rd property? Looking at those figures, if your PPOR is worth $360k and you have a loan of $220k then there’s a fair bit of equity there you can access.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Thanks Jamie
my only concern would be that I have read its good to use diffrent banks so how would that work? As my current bank holds mortgage over both properties wouls a third bank get involved? cheers JodieHi Jodie,
Not a broker – so listen to the experts.
I assume your loans are cross collateralised – when banks have a second mortgage this is normally the case.
In your instance your total assets are worth $590K with debts totaling $450K. At this level your loan to value ratio debts/assets is 76%.
If you refinanced your loans up to 80% this would release a further $22K which you could place in a line of credit and which could be used as a deposit on another property. The loan for this next property could be sourced at a different bank.
Now you may be thinking $22K isn't much of a deposit – can we get more?
Banks are sometimes happy to lend more than 80% of the value of your assets if you prepared to pay lenders mortgage insurance. If you are self-employed you may experience some difficulties going over 80%.
Let's assume you want to extend your refinance to 90% (as an example) this would provide you with up to $81K available funds as follows: 90% of $590K (property value) = $531K less existing loans of $450K = $81K available.
From this you would need to pay LMI of around 2% (sometimes less – sometimes more). In this instance your LMI bill may be in the vicinity of $10K which still leaves approx $71K for deposit money.
Irrespective of which way you go using a line of credit strategy like this can allow investors to take their business to another lender.
But – this is important – you need to be working with a broker.
Hi Jodie
Yes from the sounds of it the loans are x collateralised so like anything not a problem until you have a problem and then regretfully it is too late.
To be honest might take a while but i would strongly suggest you look to untangle the security mess before going further.
You want to access the equity from your PPOR but dont want to have the other properties securing the position.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
You must be logged in to reply to this topic. If you don't have an account, you can register here.
