Ok processing 
Is it wiser for me to refinance and rent this house out & be better off in the long run ???
Is it wiser for me to refinance and rent this house out & be better off in the long run ???
Any mum & dad investors?
- Thread starter wealthynfree
- Start date
You have also probably forgotten to take into account the FHOG.....not sure how much you got when you built, but you never get that again.....so in effect, you have built a house to use the grant to pay out your debts???
The value will go on on your property, maybe not tomorrow, but it will go up......your mortgage will go down if your a good boy and pay (is interest only and option for a while , year or two until the credit cards are getting paid down).
If you rent it out, you have so many more options available to you that will work, but I'll leave that for the proffessionals to advise on.
Doesn't sound like it would be 'worth' it to sell your place, you lose too much.
The value will go on on your property, maybe not tomorrow, but it will go up......your mortgage will go down if your a good boy and pay (is interest only and option for a while , year or two until the credit cards are getting paid down).
If you rent it out, you have so many more options available to you that will work, but I'll leave that for the proffessionals to advise on.
Doesn't sound like it would be 'worth' it to sell your place, you lose too much.
Most of us older people on the forum will tell you that selling is the worst thing you can do.
When I was a newlywed with two babies, hubby got retrenched (with no payout), interest rates went to 17.5%. We did everything we could to keep the house. For around two years we lived on a diet of rice, noodles and baked beens. Those large processed rolls of meat (at least they call it meat) was cut into slices and put on sandwiches, BBQ'd, fried, diced and eaten for many meals. Noodles (the .20c variety were mixed with eggs for omletes.
I sold Avon, Tupperware, cleaned Sani Bins and many more things. Hubby sold vaccuums door to door as well as some other really strange, sometimes disgusting jobs.
We did this to save our home. It was not a nice new home like yours. It was a crappy, disgusting hovel. It was all we could afford, but it was ours. If we had not have done the hard yards, it would have taken us a long, long time before we could have purchased again, if at all.
Do whatever it takes. The kids are young, they won't remember any hardships, and if they do it will do them the world of good. Kids only get more expensive as they get older. Just imagine trying to save for another deposit with a couple of kids.
Get those loans under control, and don't get any more. If you hold onto the house and get control of your finances you will be in a VERY secure position as you get older. From someone who has been in a very bad place, I can tell you with all honesty that it is worth it.
This is your wake up call. Don''t resent it, embrace it. Keep yourself involved here, learn and who knows what kind of bright future you may have.
When I was a newlywed with two babies, hubby got retrenched (with no payout), interest rates went to 17.5%. We did everything we could to keep the house. For around two years we lived on a diet of rice, noodles and baked beens. Those large processed rolls of meat (at least they call it meat) was cut into slices and put on sandwiches, BBQ'd, fried, diced and eaten for many meals. Noodles (the .20c variety were mixed with eggs for omletes.
I sold Avon, Tupperware, cleaned Sani Bins and many more things. Hubby sold vaccuums door to door as well as some other really strange, sometimes disgusting jobs.
We did this to save our home. It was not a nice new home like yours. It was a crappy, disgusting hovel. It was all we could afford, but it was ours. If we had not have done the hard yards, it would have taken us a long, long time before we could have purchased again, if at all.
Do whatever it takes. The kids are young, they won't remember any hardships, and if they do it will do them the world of good. Kids only get more expensive as they get older. Just imagine trying to save for another deposit with a couple of kids.
Get those loans under control, and don't get any more. If you hold onto the house and get control of your finances you will be in a VERY secure position as you get older. From someone who has been in a very bad place, I can tell you with all honesty that it is worth it.
This is your wake up call. Don''t resent it, embrace it. Keep yourself involved here, learn and who knows what kind of bright future you may have.
agree with trying to keep your home, not selling.
get some financial counselling to assist you with setting up and maintaining a budget. to reduce your debts and prevent more.
sad if you do sell, plus it is expensive to sell and to then move into a rental.
good luck. get some independent advice.
get some financial counselling to assist you with setting up and maintaining a budget. to reduce your debts and prevent more.
sad if you do sell, plus it is expensive to sell and to then move into a rental.
good luck. get some independent advice.
The house mortgage is $240,000
its on the market for $370,000
we have $50,000 of debit ($27,000 personal loan $20,000 credit cards)
IMO the best option for you will be to refinance and add the $27K+$20K to your homeloan so your new loan will be $287K.
As soon as you do that your repayments will reduce significantly because you won't be paying the credit card at 15% interest you'll be paying that amount at homeloan rates.
Also, as you new loan will be more than $250K you'll also qualify for 0.7% discount on the whole loan so you'll be paying 6.7% interest or $370 per week which is no much more than paying rent.
Do you understand what we're saying?
You should try and get ahead now that the kids are small and don't have many expenses.
By the way.
To lower your repayments you can also change your loan to interest only but from what I see you have poor money management skills so you should leave your loan as principle & interest because its the only way you'll be able to save any money.
How realistic is getting a $290,000 loan on a $74,000 income?
We really need some more answers to give better advice. (feel free not to answer if you don't want too )
What kind of income are we talking about?
How much would you need to spend on rent if you sell your place?
Do you have any kind of budget or savings plan you are working on?
I really think that if it is at all possible to keep the house you should try too. After the selling costs (REA fees, conveyencing, etc) and debt paid off, I doubt you will be left with as much as you think. You will be debt free, but you will be back to square one - no savings and no assets. And if you are like the majority of the population, you will soon find ways to run tthat debt up once more (been there, done that myself).
Refinancing you bad debts and consolidating them into one loan, should help lower your weekly obligation and free up some cashflow, which can in turn be put into good use in paying of that bad debt as quickly as possible.
)What kind of income are we talking about?
How much would you need to spend on rent if you sell your place?
Do you have any kind of budget or savings plan you are working on?
I really think that if it is at all possible to keep the house you should try too. After the selling costs (REA fees, conveyencing, etc) and debt paid off, I doubt you will be left with as much as you think. You will be debt free, but you will be back to square one - no savings and no assets. And if you are like the majority of the population, you will soon find ways to run tthat debt up once more (been there, done that myself).
Refinancing you bad debts and consolidating them into one loan, should help lower your weekly obligation and free up some cashflow, which can in turn be put into good use in paying of that bad debt as quickly as possible.
Dunno, 74K is considerable when you're not wasting it.
Christine should be able to help with the calcs.
I'm assuming that with the personal loan and the 5 credit cards you probably won't qualify but when you approach it as a consolidation and cancel your credit cards you should be ok.
Otherwise hide a couple of kids, send them to live with your mother in law or use the method I mentioned earlier to qualify. Once you fix this mess then stick to a program where you only buy gadgets when you can afford them and you'll be fine.
OMG! I am freaking out, we just had a call from the agent saying we have an offer & he wants to see us both tomorrow........help me what should i do? I dont even know for sure that we can refinance but i understand now after 'this' aha moment that we should.
The house has been on the market for 12 weeks and this is the first offer, what do I do?
The house has been on the market for 12 weeks and this is the first offer, what do I do?
Don't rush into selling!!!!
It is the REA's job to get you to sell, so they will push you, don't let them rush you! They just want a quick sale, because it is how they get paid. (Hell I went into buy a house and the agent spent the whole time trying to convinve me to sell mine).
Talk to a broker tomorrow about refinancing possibilities. Tell your REA that you need time to think about it all and talk to your bank about your options - don't let them bully you, this is YOUR House and YOUR money and YOUR future. If you do still decide to sell, at least make sure you have really looked at all your options properly.
It is the REA's job to get you to sell, so they will push you, don't let them rush you! They just want a quick sale, because it is how they get paid. (Hell I went into buy a house and the agent spent the whole time trying to convinve me to sell mine).
Talk to a broker tomorrow about refinancing possibilities. Tell your REA that you need time to think about it all and talk to your bank about your options - don't let them bully you, this is YOUR House and YOUR money and YOUR future. If you do still decide to sell, at least make sure you have really looked at all your options properly.
If it was me, I'd tell the agent that we're not selling
and I'd contact one of the mortgage brokers here to assist you in refinacing and consolidating your loans
Yes it is the first offer which makes it even harder for us as 3hrs ago we thought selling our home was the right thing to do.
We didnt put it on the market because of our debt we put it on the market to get into property investing. Thinking if we could pay out our bad debt at the same time it would be a bonus.
We didnt put it on the market because of our debt we put it on the market to get into property investing. Thinking if we could pay out our bad debt at the same time it would be a bonus.
Its the wrong way to go about it.
You can gear against your PPOR and get money to use as a deposit for an investment property.
That's how every1 is doing it it because we avoid the selling costs.
And none in his right mind sells his PPOR to go and rent when the mortgage repayment would have been almost the same as paying rent. In our situation we have several investments but our PPOR is our best investment because of it's tax free status.
Selling a house is NOT the way to get into property investing. So if you don't have to sell to pay off bad debt DON"T.
Go and talk to a financial planner, read the threads in this forum, buy some property investing books, visit a mortgage broker (or 5), find out all you can about property and investing in it. Because the first investment most people make is in their own home. That is the first step for most, and you are already there.
Thankyou everyone so much for your advice. It is hard when you dont always have the right people to talk to.
This is actually our 4th house we seem to just be going round in circles.
We looked into selling this one as a few people had told us that we could get to our second IP quicker if we could get our heads around not needing a to own a 'home' & using "the tax man" and "other peoples money".
But everything that has been said here tonight makes alot more sense.
Oh and just to clarify, we think of the $20,000 of credit cards as a top up loan as we used most of it on flooring, fencing, heating/cooling, landscaping etc to we arent total duds with money ......just still learning as we go!
This is actually our 4th house we seem to just be going round in circles.
We looked into selling this one as a few people had told us that we could get to our second IP quicker if we could get our heads around not needing a to own a 'home' & using "the tax man" and "other peoples money".
But everything that has been said here tonight makes alot more sense.
Oh and just to clarify, we think of the $20,000 of credit cards as a top up loan as we used most of it on flooring, fencing, heating/cooling, landscaping etc to we arent total duds with money
......just still learning as we go!You must be getting your advice from the wrong people.
If you're interested in property investing stick around here where you'll find many like minded people and some are from SA as well.
It should have been done using a top up on the homeloan
and not on credit card. Listen to skater and get a mortgage broker who will help you get the loan refinance approved.
Thanks again, we definitely will be sticking around
Hubby is off to see the REA first thing tomorrow to take the house off the market
Hubby is off to see the REA first thing tomorrow to take the house off the market
Check your contract with the real estate agent first. I have heard of clauses where all the agent has to do is find a buyer, and you're liable for the comission, whether you proceed with the sale or not. don't panic as I can't remember where I read this nor do I know how common it us, but you'd better check it before you approach them to cancel the sale so you know your position because they will probably try to bully you into selling.
