financially confused!

[rie]

hi everyone,
i have just recently joined the forum and this is my first post, so please bear with me. (before i jump in, this is a fantatsic site and well done to everyone that contributes it is riveting reading for a newbie like me).
my husband and i have just recently jumped into the IP pool and we purchased a + geared property in a small rural town, with negligible growth.
we accessed the equity we had in our PPOR aswell as doing some debt consolidation. currently our PPOR is valued at 230k and we owe 174 k on it and 45k on our IP. we paid 65k for the IP and it rents for 150/ week. our PPOR is P&I and the IP I/O. my question is, as simple as it may be... where to from now? do we have enough equity to purchase another IP,( we are keen to do so) What is our borrowing power? is a LOC a good option for fast tracking us towards our goal. if so based on these basic figures can anyone tell me how much we could get a LOC for? what is the best strategy for paying of our PPOR faster?
so many questions, so i give thanks in adavnce for any replies and appreciate any advice what so ever.
regards
rie

 

[geoffw]

Hi Rie,

Welcome to the forum. I hope you find some great help.

That's not a bad return on your IP. Well done.

My calculator is not working-but it looks that you have borrowed to 70% of combined value. You can usually borrow to 80% (Loan to Valuation ratio- LVR) before you get charged mortgage insurance.

I'd guess on those figures you could use about another $20K to buy a similar property.

Though I have a little reservation about the "negligible growth". What does the town have to offer? Will it actually decline? Or is there an industry which might keep people there? How will the either the continuance or finish of the drought hit the economy of the town?

If the property shrinks in value, positive cash flow will not help your long term goals much. If the town's economy is ad, you might even struggle to find tenants.

I don't want to put you off. You've made a first step- and that's fantastic. I'm just suggesting that you do need to do your due diligence, and to ensure that what you buy is viable for a long time to come.

And also bear in mind that property is a long term game. As exciting as it is to get that property, and as anxious as you are to continue, the benefit will be many years waway- so a wait just now may not be that bad in the long term.

 

[Rolf Latham]

Hi Rie

I would say if your incomes are enough you have sufficient equity to purchase another 200 to 300 k worth of IPs if you are geared to the teeth and you can get Mortgage Insurance where you want to buy.

Basically you could do a 90 % refinance on the PPOR, do an equity draw of around 33 000 and then use that 33 000 to buy with 95 % loans.

Much depends on whether you are happy with that sort of debt around your gills.

Ta

rolf

 

[GlennM]

Rolf,

Besides the ANZ, who else lends 95% for Investment Properties?


GlennM.

 

[Rolf Latham]

Hiya

Bankwest will do I/O

Westpac will do P&I

Rams will do I/O

and some other small fry

Ta

Rolf

 

[raoul]

Hi

I just took out 105% IO on an IP with NAB. (100% plus costs)

(But, I also have another IP with them P&I loan of approx $96k on a property valued at approx $250k.)

regards

raoul

 

[Rolf Latham]

Hi Raoul


Yep you can borrow 200 % + if you have enough cross-collateralised properties.

In this particluar model we are looking at stand alone security I think.

ta

Rolf

 

[raoul]

Hi Rolf,

Thats true - but Rie's original post (which I admit I only glanced at at first) lists PPOR and an IP, so I assumed it may be relevant. I didn't spot any requirement re standalone security.

Either way, I'm probably a little off-topic since her question seems more directed at LOC and paying off PPOR as fast as possible.

(Perhaps I was a little hasty in posting - I was hoping to return something of value to the forum from which I've derived many snippets of useful info.)

regards

raoul

 

[Rolf Latham]

Raoul

Pleeeeeeeeeease feel free to post whenever and whatever, I wasnt trying to be cynical, just pointing out what is not obviou to many people

Your contributions are always valued.
Ta

Rolf

 

[rie]

financially confused

hi
thanks to everyone that replied to my first post.
i guess we are still trying to get our heads around an effective way to maximise our buying power (I suppose thats the 64k question each and everyone has!!!) i realise that we need a good broker, solicitor and accountant who understands what we are trying to achieve. is anyone out there able to recommend any of the above mentioned? we are located on the north coast nsw, almost on the border of qld. i know it is an important step to seek and find but i have also learnt that it is valuable to leverage off those who are in the know! hopefully i haven't been to forward in my requests.
thanks again to everyone and now i have found this site, i am sure there will be many more posts!
regards
rie
ps rolf, i was wondering in what area is your expertise?

 

[geoffw]

ps rolf, i was wondering in what area is your expertise?

rie,

the link on his signature (www.asapfinancial.com.au) will tell you what he is- a mortgage broker.

What it won't tell you is the great knowledge he has on anything to do with mortgages as related to investment properties. Many people who try to lend you money don't have knowledge about what people investing properties are after.