Hi All,
This is my first time on the forum but have been reading it for ages. There are so many informative & helpful people on here so I thought I would put my questions to you all!
Can anybody recommend a good mortgage broker with lots of property investing experience and knowledge in the Melbourne area?
We are hoping to buy our first investment property early to mid 2012 and need someone who can help us structure everything right from the beginning.
My other question is, we have a considerable amount of credit card debt and only about $80k equity in our PPOR, does anyone know if there is any chance a bank would lend to us in this situation or would we need to pay the credit cards before they will even look at us.
We are new to this and any help would be greatly appreciated. We are in our late 20's and really want to get in property investing asap.
Thanks in advance!
You should get a personal loan and pay the credit debt first. You are paying too much interest on your debt at the moment
To start investing you have to change you habits and understand that you have to spend less than you earn, pretty basic rule
.Hi Dreaming Big
Certainly having large amounts of unsecured debt is not ideal but it all boils down to your serviceability and whether holding such cards will effect your borrowing capacity.
Maximum lvr on a standalone IP loan would be 95% + LMI so you would need to be able to access at least 5% + acqustion costs from your PPOR. When you mentioned the equity is this figure actual equity or useable equity as there is a big difference.
Regretfully without more hard data it is difficult to advise you further.
Once we got your house in order to enable you to go forward we could look at structures and how to proceed.
Yours in Finance
Richard Taylor | Australia's leading private lender
Do not get a personal loan to pay down Credit card debt as you will just be digging yourself into a bigger hole.
There are a couple of option but that is not one of them.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Agree with Richard – no personal loan here.
Need to bite the bullet and get your financial house in order first. No simple fix other than to change your habits and pay the bloody things off.
First cut all credit cards up except for one 'essential' card – this should also be the card with the lowest interest rate..
Get that cc debt under control. Start with the smallest debt and throw as much as you possibly can (I'm tallking serious money here not an extra $5/month) at the smallest debt amount first. Then when that is out of the way throw the same amount of serious money + what you were previously paying on the first debt at your next target (next smallest debt) and continue to repeat the process.
If you can’t show the bank you have evidence of “genuine savings’ (your bank account going up each month) they may find it hard to lend you money as they fear you won’t be able to service the loan.
I would suggest paying off the credit card asap, then buying an investment property afterward.
If you are likely to pay off your credit card debt in less than 6 months, you may want to consider transferring the balance to another bank’s credit card to take advantage of the “6 months interest free” period or similar offer. I did this after finishing university. Although I would only suggest this if you plan to, and can afford to pay it back in the required time.
Good luck.
Dreaming Big wrote:Hi All,Can anybody recommend a good mortgage broker with lots of property investing experience and knowledge in the Melbourne area?
We are hoping to buy our first investment property early to mid 2012 and need someone who can help us structure everything right from the beginning.
Give Richard ( Replied to your post above) a call/email ; he may not be in Melbourne, but he will def get you the right loan and structure to suit your needs.
+ he has more then your average 2-4 IP
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Acceptance Finance
Ask for Andrew Sanger
1300 93 11 55
This guy has been making money out of air for me for a while now. He is an investor himself with property east of Melbourne.mwooding wrote:Acceptance Finance
Ask for Andrew Sanger
1300 93 11 55
This guy has been making money out of air for me for a while now. He is an investor himself with property east of Melbourne.Or you could just go with Richard who has responded above, has the runs on the board is an IP specialist. Distance isn’t an issue.
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 for your recommendations and advice everyone.
I agree, I don't think a personal loan is the right path as the interest rates arent much different to the credit card rates.
I thought about a balance transfer – I might look into that a bit more. Thanks Derek & chrisodonnell87 for the advice on getting the cards down.Richard, the $80k is (house worth $420K – $450K but we owe $350K) so its not the usuable equity.
We were thinking maybe we could renovate our bathroom (its the only room in the house that is dated) to create some more equity. My husband is very good with that kind of work and we think we could improve it relatively cheaply so we dont over-capitalise.As for the IP, we wouldnt be looking at buying anything too expensive and would be looking at regional areas over the capital cities at this stage.
The other thing we need to do is work out our long term investment goals and what strategy we need to implement to achieve this. Do the companies that provide this service cost a fortune?
Cheers
Dreaming Big wrote:Richard, the $80k is (house worth $420K – $450K but we owe $350K) so its not the usuable equity.
We were thinking maybe we could renovate our bathroom (its the only room in the house that is dated) to create some more equity. My husband is very good with that kind of work and we think we could improve it relatively cheaply so we dont over-capitalise.As for the IP, we wouldnt be looking at buying anything too expensive and would be looking at regional areas over the capital cities at this stage.
The other thing we need to do is work out our long term investment goals and what strategy we need to implement to achieve this. Do the companies that provide this service cost a fortune?
A few comments based on your follow-up information.
1. Your available equity is extremely limited and I would suggest the is very little room to move if the valuation comes in at $420K. On a 95% lend the amount of equity released would be largely consumed by LMI premiums. Thus making the whole exercise somewhat a waste of time.
2. You will need to improve the value of your home or wait for the market to move before you are really in a position to go again. A bathroom renovation may do some of this for you – just beware of over-capitalisation.
3. Just be aware that cheap is often cheap for a reason (limited growth, poorly maintained, white ant riddled and so on) – if you are going down the cheaper line make sure you choose very wisely and don't purchase 'just because you can afford it' – sometimes waiting can be a great move too.
4. As you state the key is to work out your strategy – this is the most important decision of all. Any strategies you consider must take into account your personal situation such as finances, goals, risk aversion levels, family situation, career security and so on. Having said that while having a long term strategy in place is strongly recommended you also need to allow for a degree of tweaking. I have seen a number of people who have put their blinkers on and failed to see the wood for the trees.
Good luck with it.
Ahve to agree with Derek if we look at the numbers
Assume value of $420K x 90% = $378K (less LMI) – Existing loan of $350K gives you realistically useable equity of around $25,000.
Now assume you found a property for $250K and could borrow 95% = $237,500 the other $12,500 is going to be more than swallowed up with your acqusition costs. At $200K you are still about break even.
Remember a small room renovation may look nicer to you but doesnt necessarily tip the balance in the favour of the valuer.
Personally i would forget expensive seminars, organisations that charge you for selling you a property or telling you that buy one a year and your problems be over but nuckle down and start paying down some debt.
Look to maybe roll the cars over to Nil or Low interest card with interest free period, cut up the other cards and then establish a realistic budget and pay down as much as you can over the next 3-6 months. Dont worry about making additional repayments on your home loan at this stage but focus on debt reduction.
Once you have eliminated these then you can possibly think about an IP.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thank you for all your advice Derek and Richard.
Looks like I just need to concentrate on the debt reduction and worry about investing once its in a better situation.
Meanwhile, I'll keep reading the forums, books, magazines, websites etc and gain more and more knowledge until the time is right to proceed.I am currently looking at applying for a balance transfer interest rate of 0.99% for 12 mths for our credit cards.
If I get the card, I'll pay it down as much as I can, as quick as I can and hopefully I'll be posting on here sooner rather than later about my first IP purchase!When it comes time to take the leap, I'll definitely keep you in mind Richard!
Thanks again.
Db thats exactly the sort of rate you should be paying for a balance transfer – well done.
Keep us informed of your debt reduction progress and good luck.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Financial_Help wrote:You really need to pay all the mortgage before you want the lender and Mortgage benifits. It will also effect you when you will go to ask loan…This poster doesn't kno what they are talking about. Just writes anything to get his links loaded.
Lately PI.com is full of spam. The somersolf forums are much better
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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