please tell me if I am wrong.
We have Large equity and large offset, but very average job and young kids. we were told our income is not enough for investment.
Since I began to work more and we are got told we have enough money to borrow. However, I only just discovered that only the equity loan relates to the couple’s income because the bank will lend 80% property value anyway.
So does this mean I have worked so hard just to release the equity? If this is the case, we could just use our offset money as 20% deposit and let the bank lend us 80%. Furthermore, we now suddenly got the equity released for 20% deposit of two houses. Does this mean we can suddenly buy any two properties together? Doesn’t matter if it is $400k or $800k because the banks always lend 80% property value anyway as long as I have enough deposit.
It seems so strange to me.
Thanks in advance for your time!
They most certainly DO NOT just lend 80% of the purchase no questions asked, furthermore the new debt is stress tested at a far higher rate than you’d actually pay at the current time – you’ve certainly been given a bit of wrong information.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Two parts. Deposit and serviceability. Deposit can be from the equity. Any new loan will need to be serviced. Ie paid. This can be from rent (rules apply to the amount), salary or any other income you can prove. So no, you won’t get a 800k loan unless you can prove you can pay it.
Furthermore, we now suddenly got the equity released for 20% deposit of two houses. Does this mean we can suddenly buy any two properties together?
Hiya
It’s impossible to answer without knowing the specifics of your situation.
Who said you couldn’t borrow? Was it a bank or broker? If a bank – they will be restricted to their own borrowing capacity calculator whereas a broker will have access to many lenders.
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]
Hi mddedf
Certainly you can go above an 80% loan to valuation but would need some actual numbers to provide you with a more structured response.
Cheers
Yours in Finance
0-40 properties in a decade. Ask me how,Richard Taylor | Australia's leading private lender
Thanks very much for all your replies!
We thought we have very limited income (only about $100k as a couple with two kids), but we got told by two brokers that we can even buy more than one investment properties, because 20% deposit will come from the equity, and with our current income we can release enough money to get deposits for two investment properties. For the rest 80%, the bank will lend us anyway as it doesn’t relate to the level of income, it should be calculated by the potential rental income.
Is that right?
A broker will respond with more info. But my bank only considers a certain % of rent a income. It’s unlikely you will cover your mortgage with only a % of the rent. Not to mention whether you want to risk having it empty for a while. Is your house paid off? They might be using your income because you have no real debt in your own house.
mddef no i hate to say you have been badly advised.
All of your income & liabilities will be taken into consideration when applying for any loan.
If in doubt get a second opinion.
Cheers
Yours in Finance
0-40 properties in a decade. Ask me how.Richard Taylor | Australia's leading private lender
Is that right?
Nope.
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
Thanks for all your replies! They are so helpful. We will definitely have to research more before going ahead.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
