Finance for 2nd Property

[gregvinton]

Hi All,

I have a question about what options I have to fiance a 2nd property (first IP)

My Fiance and myself bought our first place Nov last year for 430k, we owe $409k on this now, a townhouse just in the same part as ours (exactly them same as ours) sold for around $490k (I need to get a valuation of my place), this was about 2 months ago.

I am wanting to look at getting my first IP, the problem is that I am saving for a wedding late next year (october) Am I best to wait till after the wedding to get a IP? Or can I used the equity in my place to get another? I have been reading about LOC to use for this as well, but not to sure on the workings of this?

So far I am thinking I am going to have to wait till after october next year....

Oh one more things, can anyone point me to a good Mortgage Broker in Melbourne?

thanks in advance for your help.

 

[bradje]

Mate, u need to do some homework with pen and paper. If u buy an IP, then what rent will u get?
How much deposit can u put down? Will it be 20%? If not u r up for Insurance on the loan, which some don't mind paying, if they get a good deal on the purchase.

So for example, if u buy a place for $400K total (including fees and stamp duty) and have 5% interest, then u will pay 400000 x 0.05 = 20K in interest (assuming an interest only loan). If u rent the place for the going rate in the area, say $300 a week, then at 48 weeks (assume some vacancy) you will get 48x300= 14400 in rent. So u have a shortfall of 20-14.4 = $5600 over the 12 months (before tax).
It will improve slightly with tax concessions.
So can u afford 5600/52 = 107 a week plus or minus?? (remember interest rates might go up)
If so, then u may be able to do OK if it's in a growing area, or if u can do some renos to improve the place...etc

But do the real figures on the deal...There are some good calculators on this web site that can help.
hth,
JB

PS there are several good brokers on this forum

 

[josko]

hi greg,

You will need to think seriously about your risk profile and how comfortable you will be with certain levels of debt.

Just on some very quick numbers and without going into your personal details:

You would have Approx. $66,300 on a 97k lend with approximately 10k of that going to LMI.

Your purchase price for your IP would then depend on these things:

1. Your valuation on your existing property.
2. Your income and ability to service.
3. Your deposit- All costs including Stamp Duty. (66k - LMI - Stamp Duty - Solicitors - and Mortgage fees)

Whether you purchase before your wedding or after is entirely up to you and cannot be decided by anyone but yourselves.

I have just attended three weddings in the past three months and the process leading up to them varied but was generally quite busy for the bride and groom. It can be a stressful time for some.

In a nutshell:

1. Yes, you can use the equity in your existing dwelling.
2. When to do this must be entirely up to you and your fiance.

Regards, JO

 

[BV]

Hi All,
My Fiance and myself bought our first place Nov last year for 430k, we owe $409k on this now, a townhouse just in the same part as ours (exactly them same as ours) sold for around $490k.

This doesn't mean that prices will keep going.
Considering the run Melbourne had this year maybe you've missed the boat for now.

I don't know your financial situation but our biggest investment is usually our PPOR and it's tax free. I'd concentrate on reducing your existing loan, this is very important and especially now that interest rates are on the way up, and soon you'll get married, kids will come etc