Hi Kristy,
A few points that maybe of assistance.
1. Start your PAYG form now. They take a couple of hours to fill in and the effect of them takes about 6 weeks to come through. This means you'll have two months with a lower rate of tax. While this may not be the perfect solution it will release some of the pressure.
2. I also am confused by your loan position. What you have said (and your brokers comments added in for good measure) have me lost. How did you buy the property originally? I cannot understand how your broker is suggesting your LVR is less than 80% – that just does not add up. Might be worth your while going back to your broker and getting clarification on this – how has he/she worked your loan to be less than 80%?
3. My concern is you do not seem to be in a position to ride out any unplanned expenses (eg dog). Now this may seem a bit harsh – but are you careful with your money? It could be the other side of your life can do with some financial pruning too. This may help out in the short and long term.
4. Certainly investigate rent to buy, vendor finance etc as an option. If this does not work out then I would seriously consider selling up. Sure you'll have a deficit to address but do the maths, explore some options to cover the shortfall and get creative.
PS – sorry to hear about your dog.
kochy1983 wrote:even had to borrow $700 from a friend to have my dog put downYou're kidding!!! And I thought the mongrels up in Port Hedland were price gougers.
Yes $6,000 to have the surgery he needed to have to save him (well a 50/50 chance he would survive), plus another $900 every 12 hours while he was in the vet hospital after that.
Unfortunately had to come home without the dog and with a $880 bill
You mentioned your house is worth $170k and the loan owing is $175k. Is this correct?
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
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Hi Shahin,
i would think somewhere between $165,000 and $170,000 and yes I still owe $175,000
cheers
kirsty
How much did you originally purchase the house for? Did it drop in value?
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
I purchased it for $168,000. I have been told by the real estate that it is probably worth no more or less than 18 months ago when I bought it. The reason my loan is more than the purchase price was to cover fees and pay out a personal loan
cheers
kirsty
This doesnt sound right – is the $175k the mortgage loan or is it part mortgage and part personal loan?
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Actually sorry Shahin I forgot that the $7,000 FHOG was used to pay out my personal loan, so then I was left with $175,000 for the mortgage and all other fees like stamp duty, conveyancing, broker fees etc.
Its been a long day and im probably missing something here but how did you get a $175k mortgage against a $168k purchase?
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Haha I ask myself the same thing! I wish I had of been denied the loan!
It may have been because my dad went guarantor and if I default I think he can have his house taken. Well about $44,000 of it anyway.
The loan is split so that my share is $133,000 and mine and dads together (the part that he is guarantor for) is $44,000, so I think I actually borrowed $177k on a $168k house.
Cheers,
Kirsty
Ok that explains it. This is not the best structure but back to the issue at hand I wouldn't entertain replacing good debt with bad debt.
Do you have credit cards? If so perhaps you can do a balance transfer? Have you considered fixing the loan at a lower rate (although this has other drawbacks).
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Nah no credit cards, luckily this is something I have never allowed myself.
Unfortunately the $133,000 is fixed at 6.1% for another 18 months. The $44,000 part is variable though and sits about 5.8% I think.
Do you also think going IO is the way to go?
If I was to sell, how do I possibly make up the difference between what I would get for the place and the loan payout figure (probably $15,000)? Other than saving the money is there a way?
thanks
kirsty
IO is most certainly the way to go. It should have been set up this way to begin with.
The thing is that even if you sell – there would be approx 3 month delay before you actually get the funds.
The difference would need to come from savings.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Thanks Shahin, and everyone else who replied, for all your help. This forum is fantastic and a credit to all you great people who take time out of your day to help people like me.
Thank you
Hi Derek,
Yes some huge mistakes have been made on my part. I jumped in way too quickly with little thought and guidance unfortunately. But that's the way things are I guess and I have to live with it.
Yes in the meantime I will change my loan to IO, as well as try to save to make up some of the difference when I sell.
Like I said to Shahin earlier I really appreciate the time you have taken to review my situation and write to me on this forum.
Cheers,
Kirsty
HI Kristy,
I might be well off the track but reading your more recent comments would suggest, to me, that you need to make some serious changes to your money habits.
1. FHOG used to pay out personal loan,
2. Thinking of a new personal loan for a car.
3. Needing Dad to go guarantor for approximately 20% of property purchase price.
I reckon you need a more of a savings focus in your life to such an extent you save for the things you want. A little delayed gratification will not go astray.
Now onto the subject of your current loans – what I am about to say is somewhat contradictory to my previous comment.
An option that may be worth exploring is to ask your broker if it is possible for you to sell your property and after paying out as much debt as you possibly can shifting your Dad's guarantee back to his own property on the understanding that you pay off the debt as quickly as you possibly can. Shahin may be able to say if this is possible.
Also working against this option are the break costs you are likely to incur getting out of your fixed loan.
Another option may be to see if Dad can help you out for the interest on the $44K – I must admit I am not really in favour of this but it may be an option.
But as I said at the outset I think a review of your spending habits may be in order. I can assure you it will be worth it in the long run – having had to some serious work on my folks spending habits when their money ran out. That is not to say you are heading down the same path but there are some alarm bells there for me.
Hope this helps.
kochy1983 wrote:Yes some huge mistakes have been made on my part. I jumped in way too quickly with little thought and guidance unfortunately. But that's the way things are I guess and I have to live with it.
Kirsty
Wouldn't beat myself up about it. Pretty hard to get through life without a few battle scars. Most here could tell a few stories around the camp fire I'm sure.
Half the battle is realising things are getting out of control and jumping onto a board like this for a bit of practical and moral support. Once you start to get a plan formulated in your head and couple of the pro's here mentoring you along you'll be surprised how quickly you can take back control. Having a plan and things under control again will re-empower you.
I've seen people go from zero to millionaires in under 5 years. Knowledge with a bit of personal discipline, direction and motivation can be a powerful force.
So when you get things sorted hang around. You can learn a lot here and not just about property.
Thank you The Freckle, I do feel better and, like you said, more empowered, after talking to you all. I will most definitely continue to hang around the forum. Hopefully I will update you all on my situation in a couple of months and after a few suggestions here taken on board and a better budget it will be looking a bit brighter!
Cheers,
Kirsty
Hi all,
Just thought I would give you a bit of an update on my situation.
Thanks to everyone in here who gave me advice in particular The Freckle, Shahin and Derek as it has helped me alot. I have managed to reduce my weekly expenditure by around $110 a week doing a few of the things suggested to me..
– Changing my loan to IO (save approx $40 a week)
– Getting another housemate to share rent with me (save approx $50 a week)
– Gave up the gym (save approx $20 a week)
Somehow I have even actually managed to save around a grand since I was last on here, for any unexpected costs which may occur!
So thanks guys, your help was much appreciated.
Kirsty
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