OK, so after a lot of time spent lurking on here soaking up the knowledge, and having survived the steep learning curve of buying my first place, I am now in a bit of a tricky position. My mortgage broker has called it a day and moved into another field, (I’m sure in no part due to the billion questions I asked during the first purchase!) and I am hoping to pick the brains of some of the switched on people on here. I appreciate any (Constructive) input, particularly from anyone who has been in a similar situation, I really dig some of the motivational stories and achievements of some of the people on this site, thank you.
So, the story so far:
I bought an apartment. Not long after I moved in to my one bedroom apartment with my partner, I changed jobs (Was burnt out and just stayed there to look good on the loan app), going from full time to part time job and some casual shifts, all up now about making $45k/PA. I also have my own side company, it is kicking along well ($30k plus turnover last financial year, and paying heaps of my living expenses too- car, phone, net etc and a small wage), my partner was working full time and everything was cruising. My plan was still to live in the apartment for a year or two paying back Principle and Interest on the loan and extra where I could (I’m about $5k ahead in repayments so far this year) without any help from my partner.
Shortly after I canned my old full time job I found out my partner is pregnant (Which was slated for 2-3 yrs from now as part of a glorious sea change leveraged against my current little apartment) which, while great, was spectacularly poor timing. Add to this she could not work in her job any more (Too much lifting etc) and she went back to temping and then declared bankruptcy (A bunch of loans, credit cards etc caught up with her and since she was not working full time and was going to be a mum she made the call to do 3yrs bankrupt while the bub was little since the prospects of income were low) so I’m now main income for the household. My partner now gets Centrelink etc worth about $500 per fortnight.
We realised that we were going to out-grow a one bedroom place real soon, and then her parents said they were buying an investment property up the coast and we could live in it for cheap. We planned to move early in the pregnancy and live there for next to nothing and take advantage of the minimal rent and extra parental help with the bub. This fell through badly, we got halfway done with the move and her parents place did not come through, I didn’t get the job I went for and I had already leased my apartment (I had lived there for over 6 months by then and met all the FHOG criteria, it leased in 1hr of being on market, for 12months lease), now we are renting a 2 bedroom place as a stop gap on city fringe and actually loving living out of the city.
Only thing I don’t like is the dead money rent.
I currently have about $258,000 owing on the one bedroom apartment, it is in Alexandria, Sydney, leased for $400/wk (Apartment worth about $330,000 valued at Dec 2009, may have gone up a little even since?), I am paying $400/wk principle and interest on mortgage (Almost cancelled out by the rent I am receiving), I have $5000 in the redraw, and taking home about $900.00/wk from work myself.
What I would like some input on is this:
Can I borrow against the apartment to buy a place down the coast (Wollongong area) around $270k? Is this how equity works? There a number of cheap houses I have been researching that I would be stoked with. I figure if I can comfortably meet the $400/wk current mortgage and $370/wk dead money current rent, if it is at all possible I would like to see if there is a way to make that rent money work towards a place of our own. Is it possible to refinance to put all the debt against my apartment and change that loan to IO and then use a bit ($30k?) of the equity as deposit on a new cheap PPOR?
I will sell the apartment if needs be and roll my mortgage into another place (Looking at houses sub $300k in promising pockets of Illawarra area- can commute to work while I look for local job and the values is miles better than city for family homes, market region is a bit flat though in terms of appreciation, however that does not bother me) but I would also like to have my cake and eat it too with a foot still in the Sydney market.
Is there a loan product that can do this? Will the bank add the combined outgoing mortgage amounts and knock me back on serviceability? I can make the money, and always make sure the loan is paid and my commitments taken care of, it may all just look a little all over the shop on paper- any brokers on here come across a situation like this?
I realise this is a huge chunk of info to digest and I hope it makes sense. Again, any help would be much appreciated.
Cheers,
Stu
So, the story so far:
I bought an apartment. Not long after I moved in to my one bedroom apartment with my partner, I changed jobs (Was burnt out and just stayed there to look good on the loan app), going from full time to part time job and some casual shifts, all up now about making $45k/PA. I also have my own side company, it is kicking along well ($30k plus turnover last financial year, and paying heaps of my living expenses too- car, phone, net etc and a small wage), my partner was working full time and everything was cruising. My plan was still to live in the apartment for a year or two paying back Principle and Interest on the loan and extra where I could (I’m about $5k ahead in repayments so far this year) without any help from my partner.
Shortly after I canned my old full time job I found out my partner is pregnant (Which was slated for 2-3 yrs from now as part of a glorious sea change leveraged against my current little apartment) which, while great, was spectacularly poor timing. Add to this she could not work in her job any more (Too much lifting etc) and she went back to temping and then declared bankruptcy (A bunch of loans, credit cards etc caught up with her and since she was not working full time and was going to be a mum she made the call to do 3yrs bankrupt while the bub was little since the prospects of income were low) so I’m now main income for the household. My partner now gets Centrelink etc worth about $500 per fortnight.
We realised that we were going to out-grow a one bedroom place real soon, and then her parents said they were buying an investment property up the coast and we could live in it for cheap. We planned to move early in the pregnancy and live there for next to nothing and take advantage of the minimal rent and extra parental help with the bub. This fell through badly, we got halfway done with the move and her parents place did not come through, I didn’t get the job I went for and I had already leased my apartment (I had lived there for over 6 months by then and met all the FHOG criteria, it leased in 1hr of being on market, for 12months lease), now we are renting a 2 bedroom place as a stop gap on city fringe and actually loving living out of the city.
Only thing I don’t like is the dead money rent.
I currently have about $258,000 owing on the one bedroom apartment, it is in Alexandria, Sydney, leased for $400/wk (Apartment worth about $330,000 valued at Dec 2009, may have gone up a little even since?), I am paying $400/wk principle and interest on mortgage (Almost cancelled out by the rent I am receiving), I have $5000 in the redraw, and taking home about $900.00/wk from work myself.
What I would like some input on is this:
Can I borrow against the apartment to buy a place down the coast (Wollongong area) around $270k? Is this how equity works? There a number of cheap houses I have been researching that I would be stoked with. I figure if I can comfortably meet the $400/wk current mortgage and $370/wk dead money current rent, if it is at all possible I would like to see if there is a way to make that rent money work towards a place of our own. Is it possible to refinance to put all the debt against my apartment and change that loan to IO and then use a bit ($30k?) of the equity as deposit on a new cheap PPOR?
I will sell the apartment if needs be and roll my mortgage into another place (Looking at houses sub $300k in promising pockets of Illawarra area- can commute to work while I look for local job and the values is miles better than city for family homes, market region is a bit flat though in terms of appreciation, however that does not bother me) but I would also like to have my cake and eat it too with a foot still in the Sydney market.
Is there a loan product that can do this? Will the bank add the combined outgoing mortgage amounts and knock me back on serviceability? I can make the money, and always make sure the loan is paid and my commitments taken care of, it may all just look a little all over the shop on paper- any brokers on here come across a situation like this?
I realise this is a huge chunk of info to digest and I hope it makes sense. Again, any help would be much appreciated.
Cheers,
Stu
