Can I borrow anything more?

[Tim86]

I'm wondering if I have any chance at all of borrowing anything more and how far off I am...

Are there any brokers that have access to borrowing calculators and such that could give me a bit of an idea?

It's just me and my wife. My wife doesn't work.

My job pays $58 448 after tax and $70 460 before tax.

My after tax is a bit more than you would normally get with my gross salary due to my $16 500 tax free per year that I get from salary sacrificing.

My property loans and rental income

Douglas Rd Loan = $336 000 rent = $700 per week (Westpac variable 4.94%)

Toorak Rd Loan = $160 000 Rent = our half $175 per week (Homeside variable 5%)

Caedmon Loan = $160 000 Rent = our half $375 per week (Westpac fixed 5.39%)

PPOR Kellett Rd Loan = $412 000 (Westpac variable 4.94%)

Total loans = $1068000
Total rent = $1250 per week (This income is split between me and my wife as her half of the rent will be taxed less).

We also have a $12000 credit card limit through westpac.

Is anyone kind enough to give me a bit of an idea if borrowing is possible through a certain lender? Or how much more income from rent I need before I can borrow? I'm wanting to refinance a IP to get some more available funds for a reno.

Thanks heaps.

Tim

 

[Peter_Tersteeg]

Hi Tim,

It's not clear what the total loans and total rental incomes are on the second and third properties. Purchasing property and borrowing money jointly can make things a little tricky.

As a result, based on the figures you've indicated and a few assumptions, your borrowing capacity is somewhere between $0 to $350,000. It very much depends on what you do with the money and a bit more clarification around some of the figures you've supplied.

 

[Mick C]

Toorak Rd Loan = $160 000 Rent = our half $175 per week (Homeside variable 5%)

Caedmon Loan = $160 000 Rent = our half $375 per week (Westpac fixed 5.39%)


^ Half with?? you and your wife or a 3rd party?....splitting with a 3rd party as mentioned by Pete is a bit more tricky and requires a bit more details and the full amount etc...

Need more info on;
- How the loan are split
- I/O repayments or P/I?
- Any financial dependent?
- Purpose of funds? and how much do you need?

If you email Pete, he would be able too assist.

 

[Tim86]

Thanks for the reply. The toorak rd loan is half with my parents. The Caedmon st loan is half with my sister.

My parents have enough servicability plus a heap in equity, probably a million in equity.

My sister has a heap of servicability.

So their half of the loan is sorted.

For caedmon st it's split between 3 people but me and my wife only have a half share. However because it's split between 3 people I know westpac attributed 2/3 of the rent to us and only 1/3 to my sister. So if that were corrent then we technically would get $500 per week rent from that property. And it's interest only for all loans. And it's interest only for all loans.

As far as what the loan is for. It's to do an extension at my PPOR adding 3 bedrooms that I would then be able to rent out as share accommodation which would = $480 per week more rent.

If that's not a good reason I could say instead that the money is to subdivide the block of land at Toorak rd. We are spending money on that as well but probably going to try and borrow that off of my dad because they are half in that property with us.

We also have $210 per week income that is currenty cash in hand from a friend who is living in one room at one of our IP's. We haven't got her on the tenancy agreement but we could add her if it means we are able to borrow more.

I am wanting to refinance the douglas rd property. It's currently valued at $420 000 but the market in salisbury qld has gone up a lot since then plus we have added another kitchen and ensuite and done more renos to the property since then. If I could get a reval of $500k and borrow an extra $60k that would be awesome.

Hopefully that's enough info.

Thanks for your help it's really appreciated. I'm not holding my breath that I will be able to have enough servicability but I guess it's worth asking.

Oh and we have no dependents, just me and my wife.

Also all loans are currently 80% lends except for my ppor which was 100% lend. But since all the valuations on those properties by the bank they have all gone up significantly in value we probably have $220 000 increase in value across all of our properties.

 

[Tim86]

And it's interest only on all loans.

 

[euro73]

Depends what you buy, and the rent that the proposed purchase would generate.

However, as a couple of examples of what can be achieved.... based on a 400K purchase, and assuming $400 per week rent, a 90% loan for 360K passes servicing. In arriving at that result, I've also accounted for an additional 55K to be drawn against existing equity @ 5%, to cover deposit and stamp duty and legals

If you were prepared to reduce your credit card limit to 2K, a loan of 495K for the purchase of a 550K property also passes ( just) , assuming $550 per week rent were achieved on the new purchase . I've also accounted for a separate 75K loan drawn against existing equity @ 5% - to cover 10% deposit and stamp duty and legals. If you can borrow those funds at less than 5%, the situation is slightly more comfy.

 

[Tim86]

Hi thanks for the reply. I would be wanting to borrow against the equity of my ip to get $60 000 for an extension for my ppor which would allow me to rent out three rooms to boarders and giving me $480 per week extra rent. So the calculations based on buying yet another ip probably don't fit I'm guessing unfortunately.

 

[westminster]

Tim,
It was my understanding that MANY banks safeguard themselves by calculating the whole debt of a shared loan against you (or any other member) in case the other members run off.
So although you are only 1/3 or 1/2 of a loan and the other joint members are financially stable, the bank may calculate the worst case scenario against you. BUT not all the upside of all the rent. Boo

Joint loans, therefore, can severely impact your serviceability.

I don't think there is going to be an easy internet answer for you.

If you'd like to do it then you'll need to have a more in depth talk with a broker and get their professional opinion.

 

[sanj]

Tim,
It was my understanding that MANY banks safeguard themselves by calculating the whole debt of a shared loan against you (or any other member) in case the other members run off.
So although you are only 1/3 or 1/2 of a loan and the other joint members are financially stable, the bank may calculate the worst case scenario against you. BUT not all the upside of all the rent. Boo

Joint loans, therefore, can severely impact your serviceability.

I don't think there is going to be an easy internet answer for you.

If you'd like to do it then you'll need to have a more in depth talk with a broker and get their professional opinion.

AMP are good for this kind of thing but can be an epic pain in the bum if any kind of back end competency is required. ive honestly had poos capable of more coherent thought than some of their staff.

 

[Rolf Latham]

AMP are good for this kind of thing .

STG is another

and there are subsets of other lenders where "joint and several" liability can be overcome.

ta
rolf

 

[pinkboy]

AMP are good for this kind of thing but can be an epic pain in the bum if any kind of back end competency is required. ive honestly had poos capable of more coherent thought than some of their staff.

Banks and toilet humour gel seamlessly like $h!t on a blanket!



pinkboy

 

[Tim86]

Well if there are any brokers on here that think they can magically find a lender who will loan me money then it would be really appreciated if you could shoot through a pm to me so we could discuss further. If it were possible for me to refinance one of my ips and borrow a little more I would be jumping at that asap and would need a broker for it.

Thanks

Tim

 

[Qlds007]

There are a few more bits of information required for a full assessment but i don't think you are a million miles away.