Hi there
I have read this forum for some time now and have enjoyed gaining plenty of knowledge from posters. With a growing family, among other options my wife and I have a scenario to ponder and would appreciate some input.
We currently own a 2 bedroom PPOR in Niddrie, and there are a couple of 3+ bed houses in closeby suburbs that we are interested in as a new PPOR, and we would then convert our old PPOR into IP #1. I have crunched some numbers and would like some feedback.
My current income - $88k (ongoing position, state government)
My wife is currently on mat leave returning to an ongoing teacher job in Nov 2011 @ 1 day per week, and minimum of 2.5 days next year. Her salary level is $68k so income would be equivalent to $14k @ 1 day per week, $34k @ 2.5 days per week next year.
Current Niddrie PPOR: Est. value - $450k, NAB mortgage 50/50 split title - $285k, Est. rent value $400 p.w
Est. max purchase price for new PPOR - $550k
Offset savings - $35k
Credit card limit - $10k (could reduce to $5k), balance is cleared each month.
No other debts.
I have looked at using $75k of equity (up to 80% total LVR) in current PPOR to purchase the new PPOR, + the $35k cash. After transaction costs, this would leave approx. $465k mortgage on new PPOR with some LMI to pay (or I may be able to get some extra cash to end up under 80% LVR). This would then leave $360k on the old PPOR which would become our 1st IP. (But only $285k deductible as I understand it.)
Question 1 - Can my wife’s income be counted even though she is on mat leave? She will be back at work before any settlement date arises. I struggle to see how we could secure finance without her income being counted?
Question 2 – Would be get finance for this arrangement?
By my calcs on our expenses cashflow, with 1+ days income from my wife we can service the PPOR loan and cover IP negative cashflow (est $300 per f/n inc all costs), but it will be tight up to $2k per fortnight combined. With my wife working 2.5+ days from next year we can do it ok and afford potential IR impacts.
I have noted the work of helpful brokers on here and would look to select one to assist with this or other purchases. I am aware of IP loan structure issues and so on, but at this point I am curious if I am on the right track with these numbers and whether I should allow my wife to get interested in the idea. Any other questions or comments would be appreciated.
Regards, TazDevil
I have read this forum for some time now and have enjoyed gaining plenty of knowledge from posters. With a growing family, among other options my wife and I have a scenario to ponder and would appreciate some input.
We currently own a 2 bedroom PPOR in Niddrie, and there are a couple of 3+ bed houses in closeby suburbs that we are interested in as a new PPOR, and we would then convert our old PPOR into IP #1. I have crunched some numbers and would like some feedback.
My current income - $88k (ongoing position, state government)
My wife is currently on mat leave returning to an ongoing teacher job in Nov 2011 @ 1 day per week, and minimum of 2.5 days next year. Her salary level is $68k so income would be equivalent to $14k @ 1 day per week, $34k @ 2.5 days per week next year.
Current Niddrie PPOR: Est. value - $450k, NAB mortgage 50/50 split title - $285k, Est. rent value $400 p.w
Est. max purchase price for new PPOR - $550k
Offset savings - $35k
Credit card limit - $10k (could reduce to $5k), balance is cleared each month.
No other debts.
I have looked at using $75k of equity (up to 80% total LVR) in current PPOR to purchase the new PPOR, + the $35k cash. After transaction costs, this would leave approx. $465k mortgage on new PPOR with some LMI to pay (or I may be able to get some extra cash to end up under 80% LVR). This would then leave $360k on the old PPOR which would become our 1st IP. (But only $285k deductible as I understand it.)
Question 1 - Can my wife’s income be counted even though she is on mat leave? She will be back at work before any settlement date arises. I struggle to see how we could secure finance without her income being counted?
Question 2 – Would be get finance for this arrangement?
By my calcs on our expenses cashflow, with 1+ days income from my wife we can service the PPOR loan and cover IP negative cashflow (est $300 per f/n inc all costs), but it will be tight up to $2k per fortnight combined. With my wife working 2.5+ days from next year we can do it ok and afford potential IR impacts.
I have noted the work of helpful brokers on here and would look to select one to assist with this or other purchases. I am aware of IP loan structure issues and so on, but at this point I am curious if I am on the right track with these numbers and whether I should allow my wife to get interested in the idea. Any other questions or comments would be appreciated.
Regards, TazDevil