Hi Everyone.
I am considering refinancing my PPOR with the goal being to 1. get a better interest rate (Currently through non bank lender) 2. Consolidate a Go Mastercard debt of $5800
3. Extend the loan around $30,000 – $40,000 for renovations or release equity whichever is best.
My mortgage is currently around $140,000 property worth around $360,000 before reno. PPOR in my name only. My income $50,000
I have technically purchased with my parents a 2 bedroom IP (I say technically as i pay no expenses) I am on the loan and deeds as 1/3 owner. How will this help or hinder my refinancing? Tax time it seems it's positive cashflow for me.We will be selling this within 12months depending on needs.
I would like to finish all the renovations on PPOR then have it re valued to access equity for an investment property in my name if possible.
My husband works fulltime and has his own business (leaving job in 6 months hopefully) however has a minor debt on credit rating $600. We would like to buy more investment properties and are wondering is it best to keep buying individually depending on income or combine for better servicability?
Husbands income $50,000 Business is sole trader with high earnings in the next few years although we would look at buying commercial property to rent to business etc in future so don't plan on including this income as yet.
Can the experts on here please help my clarify which direction to take to start our financial freedom plan and how will our relatively low income affect refinancing and borrowing?
I hope this doesn't read as confusing as it sounds to me
Your file is not as simple as a yes or no….
I suggest you sit down with a broker or a banker and go over your situation… not trying to be bias , but a broker will def be a better option as your husband is self employed and has a credit default, so your file may not sit well with a few traditional banks…
Regarding revalue- that's fine, as long as your "provable" income can match the extra loan
Regarding buying our your parents portion of the loan- also fine…but take in consideration stamp duty, capital gain and tax cost.
"We would look at buying commercial property to rent to business" – Rent to our business?? or rent for your own husband to use (SMSF may be more suitable for this option)?
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Hi and welcome aboard.
The refinance purpose is ok and the loan to value ratio is fine.
I can't comment too much on your borrowing capacity without knowing the finer details.
Owning an IP with another party will impact on your borrowing capacity – but some lenders will take into account the portion of the debt that you have (as opposed to the entire debt).
The $600 credit default may or may not be an issue – it depends on the nature of the default.
All in all, best to consult a profession on this matter and have them assess your borrowing capacity and delve into the credit default 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 the feedback..
I was hoping to refinance in my name only so we have more options at a later date. I have been on parttime work until this week so effectively my income just doubled hopefully enabling me to refinance as on 25 thou im pretty sure no one would touch me.
My husband earns 3 times his weekly employee pay per weekend but it can be affected by weather which is why he cant leabe his day job just mow. Otherwise wed be set.
Does it not help that the ip is cashflow positive or neutral?Thanks for your help I will be talking to a broker just trying to sort my head first
cathnniv wrote:Does it not help that the ip is cashflow positive or neutral?Any additional income will help. It would have to be CF+ by a fair bit to make a big difference though.
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]
Certainly on servicing a +cash flow property will aid your situation.
With the exception of 2 lenders you will be seen to be jointly and severally liable for the the entire loan on the property you have with your parents yet will only have 1/3rd of the rent allocated to your income for servicing.
Probably need to examine exactly what you want to achieve and rank the importance as you may need to get there in stages.
Careful planning needed so you don't limit yourself going forward.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks Jaime and Richard,
I will be getting advice asap.
Would it be worthwhile trying to refinance simply for a better interest rate? Currently on 7.5 with non traditional lender.
Yeah that's quite high. Some lenders are providing cash rebates for refinances too.
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]
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