Cash deposits

[blackenator]

Hi All , Just in the middle of on settling on my land in a new estate in Sydney. I am hoping once the property has been built I should have quite a bit of equity in the property to purchase more properties. I am trying to think about a plan b if the valuation does not come back to what I hope it comes back as.

I have read cash deposits should be avoided if possible if you have already have equity in a property. But if you don't have any equity in your pocket and are not able to purchase more properties is using cash a bad idea?

I am currently saving around 500 a week after mortgage repayments and once the house is built I would have enough money in my offset account to pay for another property. But from the research that I have done seems like this may not bee a good idea. What is everyone thoughts?

 

[Rolf Latham]

If your current mortgage payments are for a PPOR, you canat least cycle your cash savings into the non ded debt assuming you dont have an all fixed loan.

Say you have saved 50k for property deposit and costs

Reduce the current home loan limit by 50 k, take a new Separate loan of 50 kfor investment purposes,

Voila.

Onanother front, what are the lvrs on your PPOR and property to be pls ?

ta
rolf

 

[Terry_w]

I have read cash deposits should be avoided if possible if you have already have equity in a property. But if you don't have any equity in your pocket and are not able to purchase more properties is using cash a bad idea?

Yes, it is a bad idea if the house is going to be an investment property. Why not borrow the deposit and then refinance this loan later so you have borrowed 100% of the purchase price.

 

[blackenator]

If your current mortgage payments are for a PPOR, you canat least cycle your cash savings into the non ded debt assuming you dont have an all fixed loan.

Say you have saved 50k for property deposit and costs

Reduce the current home loan limit by 50 k, take a new Separate loan of 50 kfor investment purposes,

Voila.

Onanother front, what are the lvrs on your PPOR and property to be pls ?

rolf

The current property will be around 90% and same with the next property witch I hope to purchase around the end of the year

[Yes, it is a bad idea if the house is going to be an investment property. Why not borrow the deposit and then refinance this loan later so you have borrowed 100% of the purchase

So borrow borrow the deposit costs while keeping my savings but after securing the loan refinancing?