First Finance

Hi All

I mentioned in a separate post I now have $90k cash which I intend to use as a deposit/deposits on an IP/IPs.

The bank I currently use (which rhymes with wet-patch) has stated they will lend me $450k. I haven't lodged any formal loan application yet.

I don't want to use the whole $90k for the deposit as that would leave me a bit skinny and for a 90% lend, I have factored in LMI.

As this would be my first finance and I am looking at Brisbane suburbs, possibly free-standing townhouse where there is minimal possibility of the whole block being converted to townhouses and thus potentially reducing mv of any one I purchased, I am looking at a purchase around the $400k mark. With costs (inc LMI) this would mean I would have to kick in $70k and have a $20k buffer.

Questions:

a) Should I find the property first and then lodge a loan application as I've heard that sometimes "pre-approvals" don't mean much;
b) Someone mentioned that with $90k, I may be able to look at 2 IPs, however, to me that means they would probably have to be in the $300k-$350k mark. Not saying that's bad, but is that how others see it?
c) I already have a business loan with wet-patch, so if I had an IP loan with them and they had security over that property, do you think that would be sufficient for them.
d) Any good Brisbane based brokers I could talk to about my situation?

Many thanks

Zargor
 
Hiya

Wet patch - lol.

a) it depends on the strength of the application and what you take comfort in. If it's a fairly vanilla deal than I probably wouldn't bother with a pre-approval but I would have a subject to finance clause.

b) depends on how this fits with your plan.

c) don't let them take more security than required. This property should only be secured by one loan. Also - just because you hold other loan facilities with the lender doesn't necessarily mean they're going to be the best lender for your IP.

d) Rolf Latham or Richard Taylor

Cheers

Jamie
 
Hi All

I mentioned in a separate post I now have $90k cash which I intend to use as a deposit/deposits on an IP/IPs.

The bank I currently use (which rhymes with wet-patch) has stated they will lend me $450k. I haven't lodged any formal loan application yet.

I don't want to use the whole $90k for the deposit as that would leave me a bit skinny and for a 90% lend, I have factored in LMI.

As this would be my first finance and I am looking at Brisbane suburbs, possibly free-standing townhouse where there is minimal possibility of the whole block being converted to townhouses and thus potentially reducing mv of any one I purchased, I am looking at a purchase around the $400k mark. With costs (inc LMI) this would mean I would have to kick in $70k and have a $20k buffer.

Questions:

a) Should I find the property first and then lodge a loan application as I've heard that sometimes "pre-approvals" don't mean much;
b) Someone mentioned that with $90k, I may be able to look at 2 IPs, however, to me that means they would probably have to be in the $300k-$350k mark. Not saying that's bad, but is that how others see it?
c) I already have a business loan with wet-patch, so if I had an IP loan with them and they had security over that property, do you think that would be sufficient for them.
d) Any good Brisbane based brokers I could talk to about my situation?

Many thanks

Zargor

Hi Zargor, the type of purchase you'd like depends entirely on your strategy.

Benefits of purchasing two cheaper end stock is that it allows you to diversify your markets. Note that within large markets (Brisbane), there tends to be different price movements in sub markets. For example, for a certain period, the 500k+ market may grow faster than the <350k market. I think this is actually a common prediction for the Brisbane market - driven partly by the growing difference between Brisbane and Sydney.

Given your at the outset and planning your next moves - its a good idea to talk to a broker to build a finance plan around your goals. Going to the bank you currently bank with may not make much sense from a long term view.

Rolf is a Brisbane broker - a long term poster on the forums and finance guru (i think he's even mentored some of the others!)

Cheers,
Redom
 
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