A difficult situation.

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From: Travis Willey


Hi all,

I'm in a very difficult situation and need your help.

I just bought a house last year. However, being an average-income earner, I had to borrow 80% the value of the house. Last month, I talked to the bank about borrowing money to buy an investment property, but they said I don't have enough equity (which is right!). I'm just wondering how can I get started on PI? Also, will it help if I get a pay rise??

Thanks in advance.

Travis
 
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Reply: 1
From: Rolf Latham


Hi Travis

Get out from the bank and find someone that knows lending.

Sounds really dumb, but most bankies cant work on the concept of refinancing your home to a 90 % lend and then using a 95 % loan to purchase the IP.

If your serviceability is good and own or want to buy metro, then you should have no problems with that sort of money.

If you provide some basic numbers as to what the home is worth and what you owe we can disect right here and show others how it can be done !

Ta

Rolf
 
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Reply: 1.1
From: Russell Chellew


Hi Travis,

Purchasing an IP is certainly achievable with your current equity.

It is even possible to obtain a 95% LVR investment loan with Mortgage insurance capitalise d/added on top of the loan (ie effectively say 97% LVR).

This reduces amount of cash contribution or use of equity from existing security property.

cheers

Russell
 
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Reply: 1.2
From: Travis Willey


Hi all,

Thanks to all of you for your advice. Really appreciate that.

As to how much my house is worth, I guess it's around the 200-210 mark (This is only a guess, as I bought it for around 185 last year). The loan amount is around 148.

Travis
 
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Reply: 1.3
From: Travis Willey


Hi all,

This may sound silly, but I'm just wondering what would be the advantages and disadvatages between going with a bank and an independent broker ?

Thanks for your help.

Travis
 
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Reply: 1.3.1
From: Jas


> From: "Travis Willey" <vtecpower_@hotmail.com>

Hey Travis,

> This may sound silly, but I'm just wondering what would be the
advantages
> and disadvatages between going with a bank and an independent broker ?

The main advantage to a mortgage broker is time. If you don't have time
to run around, looking for the best deals, time to call up the banks to
make sure your loan application is going through smoothly, time to call
them daily as settlement gets close, then getting someone else to do it
is very nice.

The other very useful thing is that brokers write up a lot of business
for the bank. Therefore they have more clout with the bank to make a
deal go through/get better conditions than you do.

The other thing a mortgage broker can do for you is offer a range of
products that you might not have thought of. If your credit is off,
your serviceability is low, or anything else odd, they are for you.

The main disadvantage is that it's another person involved in the
transaction, and means making sure your communication process is smooth
to the broker.

Personally, I like having one. It means I can keep focused on what I do
best, and let the broker keep track of the ever changing mortgage
market.


Jas
 
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Reply: 1.2.1
From: Rolf Latham


Hi Travis

If you place is worth 200 and you have a 148 k mortgage then:

Refinance to 90 % lend

= 180 k - 148 to pay out exist loan plus say 5 k in Mortgage insurance and costs, leaves 27 000.

A 200 k IP with a 95 % lend would be 10 000 in deposit, leaving a huge wad of cash for costs. The only "decent" place to get a 95 % I/O loan for your IP is ANZ, who will also lend you the mortgage insurance on top, so its more like a 97 % lend.

I reckon youd even be able to get 2 reaonable IPS with the proceeds of that intial 90 % refinance.

All depends on your serviceability of course.

Im sure either Kellie, Russell, Simon or Medine can put it together for you.

Ta

Rolf
 
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