Hi All,
I've not really posted about my personal situation before - and have focused on dishing out my $0.02 to others
. Now seeking some thoughts...
Here's our position:
My partner and I are both 25, and have a combined income of $127K before tax and we have:
1. IP - St George IO loan of $292K - paid $292K 3 years ago, probably worth about $340K now - waiting on a valuation to come through to hopefully capture some equity here.
2. PPOR - Have just had this valued at $600K, have upped NAB/homeside IO loan from $225K to $480K, bringing it to 80% of recent val to avoid LMI.
The only real equity we have is on the IP, as we actually owe $650K on my PPOR (the other $170K is owed to my parents), the bank doesn't know about this. We disagree with the recent val, (duh) - we are mid painting, have no landscaping etc, and it looked pretty crap when they came through. We are confident that we can sell it for $650K if we need to, and once finished it should value at that mark or above.
We have made bad decisions that contributed to not much (if any) profit on the PPOR reno, however we also have a self contained area of the house with two boarders bringing in $360/week - so we have been living in a very nice house for 2 years, quite cheaply. Factoring this in, we are ok with selling it and breaking even. It would work out cheaper than renting for that time.
So, how long before we can re-value the PPOR and hopefully get it increased. Will a bank consider a new valuation 2-3 months after the last one? Obviously the house will have changed and therefore be worth more, but is there an exclusionary period on valuations?
Next bit is that we made a verbal offer on an IP today (yet to be accepted, but plausible). It would be our dream PPOR in a few years, due to size, position, street etc. We LOVE the house.
The offer we made was $700K. This means we would need a deposit of $140K to avoid LMI, which we don't have. We could potentially borrow this money from family, but only very short term. The new house would definitely value at contract price based on land val, and is extremely run down.
We figure we can jump in, rip out carpets, paint, rent it out and get it valued again almost straight away. We think the value will jump, once the valuer considers the work done since the previous valuation - but how plausible is this idea? I know we could add 100K in 'market' value with elbow grease in a very short, busy window, but what about valuer's value?
In short, we will need to beg for more money from family to scrape together a deposit to keep us under 80% across the board - and I would like to be able to pay them back within 6 months - ideally 3 months.
How much distance do we need to put between settlement and a new valuation before we can break that glass ceiling of 'contract price'?
Any thoughts?
Matt
I've not really posted about my personal situation before - and have focused on dishing out my $0.02 to others
. Now seeking some thoughts...Here's our position:
My partner and I are both 25, and have a combined income of $127K before tax and we have:
1. IP - St George IO loan of $292K - paid $292K 3 years ago, probably worth about $340K now - waiting on a valuation to come through to hopefully capture some equity here.
2. PPOR - Have just had this valued at $600K, have upped NAB/homeside IO loan from $225K to $480K, bringing it to 80% of recent val to avoid LMI.
The only real equity we have is on the IP, as we actually owe $650K on my PPOR (the other $170K is owed to my parents), the bank doesn't know about this. We disagree with the recent val, (duh) - we are mid painting, have no landscaping etc, and it looked pretty crap when they came through. We are confident that we can sell it for $650K if we need to, and once finished it should value at that mark or above.
We have made bad decisions that contributed to not much (if any) profit on the PPOR reno, however we also have a self contained area of the house with two boarders bringing in $360/week - so we have been living in a very nice house for 2 years, quite cheaply. Factoring this in, we are ok with selling it and breaking even. It would work out cheaper than renting for that time.
So, how long before we can re-value the PPOR and hopefully get it increased. Will a bank consider a new valuation 2-3 months after the last one? Obviously the house will have changed and therefore be worth more, but is there an exclusionary period on valuations?
Next bit is that we made a verbal offer on an IP today (yet to be accepted, but plausible). It would be our dream PPOR in a few years, due to size, position, street etc. We LOVE the house.
The offer we made was $700K. This means we would need a deposit of $140K to avoid LMI, which we don't have. We could potentially borrow this money from family, but only very short term. The new house would definitely value at contract price based on land val, and is extremely run down.
We figure we can jump in, rip out carpets, paint, rent it out and get it valued again almost straight away. We think the value will jump, once the valuer considers the work done since the previous valuation - but how plausible is this idea? I know we could add 100K in 'market' value with elbow grease in a very short, busy window, but what about valuer's value?
In short, we will need to beg for more money from family to scrape together a deposit to keep us under 80% across the board - and I would like to be able to pay them back within 6 months - ideally 3 months.
How much distance do we need to put between settlement and a new valuation before we can break that glass ceiling of 'contract price'?
Any thoughts?
Matt
