All Topics / Finance / When would we be able to refinance if we buy?

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  • Profile photo of brizziegirlbrizziegirl
    Participant
    @brizziegirl
    Join Date: 2009
    Post Count: 16
    June 8, 2012 - 9:55 pm

    Hi

    We are looking at buying a house in Brisbane for $185,000. It needs cosmetic work and I believe the property is discounted about 20% as the bank is taking it back. I anticipate the value of the house once tidied would be around $225k-$240k.

    If we buy the home, reno and rent out for $300 a week, and if it values to $230k – would we be able to borrow 80% of this value within a relatively short time frame i.e. a couple of months? The plan would be to use equity in this property to then buy another and probably cross-collateralise to do so?

    Any finance feedback is most appreciated.

    Thanks

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    June 8, 2012 - 10:53 pm

    Hi there

    It's possible to tap into equity in a short time frame – not all lenders allow it but there are those that do.

    If the equity is available, then there's no need to cross collaterise the two properties.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    June 8, 2012 - 11:40 pm

    Brissiegirl

    As Jamie has mentioned Yes it certainly is possible but not every lender is going to allow it.

    Then of course you have the issue that whilst you may think it is worth a given figure the valuer may disagree. 
    Most lenders use Valex which is a valuation exchange system whereby they plug in the property information and Valex randomly finds a valuer from their panel to pick up the job. Doesnt necessarily mean it will be the valuer you want.

    As an example we have had 3 valuations done in a fortnight for a particular forum client here in Brisbane:

    House purchased Oct 11 – $500,000   (Clients have done 40K of reno work).
    First valuation – $496,000.
    Second valuation – $585,000 (different valuer)
    Third valuation – $550,000

    All 3 valuers came off the Valex system.

    My final comment would be on the fact that you are looking to draw on the equity and then cross collateralise the securities.
    If you ever going to have a problem down the track crossing the loans isnt going to help but certainly will hinder you going forward.

    This would have to be the worst stategy for investors.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of brizziegirlbrizziegirl
    Participant
    @brizziegirl
    Join Date: 2009
    Post Count: 16
    June 9, 2012 - 6:10 am

    Thanks so much for taking the time to reply, and I appreciate the information about cross collateralising.

    My main thing is trying to stay at least one step ahead of my next planned move so I stay on track with a strategy.

    I really value having this forum where you share your knowledge. It’s really helpful.

    Cheers
    Brizziegirl

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544
    June 9, 2012 - 9:53 am
    Qlds007 wrote:

    First valuation – $496,000.
    Second valuation – $585,000 (different valuer)
    Third valuation – $550,000

    All 3 valuers came off the Valex system.

    And they will all say they are right and the others are wrong. Amazing!

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