help with serviceability

[onthebus]

Hi I have a serviceability issue and was wondering if there is any way I can do this – like a non conforming loan, bridging finance for more than 6 months, if needed?
I have 2 properties, NSW value around $300k, loan $200k, and Tas, value $175k, loan $150k. I want to buy a house for $300k (value $320k) and then put the NSW property on the market.
Problem is apparently my serviceability is not enough to hold all 3 properties. (I know I could manage). One bank has come up with a refinance for the 2 that I currently own, but will only lend me about $90k for the new property. I need about $255k. Any ideas here? If this is impossible, I have thought about asking a friend to become a co borrower until I have sold the NSW property and then take the loan on myself and remove their name from the mortgage. Any thoughts? The property I want to buy is a special one, and would provide all kinds of opportunities + a great place to live, so I want to exhaust all avenues before walking away. Can anybody recommend a broker / finance person that may be able to help? (I’m in Hobart) Thanks for your time.

 

[Rolf Latham]

Hi I have a serviceability issue and was wondering if there is any way I can do this – like a non conforming loan, bridging finance for more than 6 months, if needed?
I have 2 properties, NSW value around $300k, loan $200k, and Tas, value $175k, loan $150k. I want to buy a house for $300k (value $320k) and then put the NSW property on the market.
Problem is apparently my serviceability is not enough to hold all 3 properties. (I know I could manage). One bank has come up with a refinance for the 2 that I currently own, but will only lend me about $90k for the new property. I need about $255k. Any ideas here? If this is impossible, I have thought about asking a friend to become a co borrower until I have sold the NSW property and then take the loan on myself and remove their name from the mortgage. Any thoughts? The property I want to buy is a special one, and would provide all kinds of opportunities + a great place to live, so I want to exhaust all avenues before walking away. Can anybody recommend a broker / finance person that may be able to help? (I’m in Hobart) Thanks for your time.

Hi OTB


Try and find a way to make this work yourself.

Asking for a friend to go on title and mortgage is a bit yucky and expensive and introduces risk for them and you.

There are lenders that do bridging on END serviceability only, but from your figures, your loan to value ratio may be a challenge as well

ta
rolf

 

[Rixter]

Why dont you just sell the NSW one up front and then buy the house?

 

[onthebus]

Hi there

Good grief - replies at this hour! Thought I was the only one, sitting on my lonesome on a property investment forum on a Saturday night!!

Yes Rolf - I agree - I would love to find a way to make this work independently. Can you tell me who the lenders are that do bridging on end serviceability? Is it really risky? I've read a bit on this forum on bridging finance and it has scared me off a bit (ie if the house doesn't sell...) Agents have said it will (estimate within a few months), but what if it doesn't?

Rixter, the house is going to be auctioned in 2 weeks (open to offers before). Someone will buy it, I'm sure. I offered $300k with a 6 month settlement and the agent wouldn't even take it to the vendor. Said no way, with an auction coming up. (fair enough - but worth a try...) Interestingly, she called me up a couple of days later, to see how I was going with trying for other finance. (So maybe my offer is a reasonable one?)

Thanks for the replies.

 

[Aaron_C]

Hi onthebus - it is very hard to work out whether you are indeed having serviceability problems or it's just the lenders who say you have servicing issues. Need more info like incomes, debts etc. Or speak to a broker about it and they can advise on it in more detail.

 

[Rolf Latham]

Yes Rolf - I agree - I would love to find a way to make this work independently. Can you tell me who the lenders are that do bridging on end serviceability? Is it really risky? I've read a bit on this forum on bridging finance and it has scared me off a bit (ie if the house doesn't sell...) Agents have said it will (estimate within a few months), but what if it doesn't?

Based on your LVR Id say none : )

Adelaide Bank is one that has very generous serviceability at both ends, and St George is another though theirservicing is pretty yuk.

We dont know enough about your overall situation and making a bunch of assumptions just makes for more trouble.

Id recommend you get a hold of a broker to look at the options in some detail, but on the numbers, and from a "responsible lending" POV, a bridge isnt likley not good thing for you,

There is poss a way to do it without bridging.

ta

rolf

 

[Rolf Latham]

Someone will buy it, I'm sure. I offered $300k with a 6 month settlement and the agent wouldn't even take it to the vendor.

well.........thats not surprising.

Generally if someone sells a 300 k asset at auction they want the place sold and settled in normalish time frame, not 4 times longer.

Do you know why they are putting it out to auction and not sale ?

ta
rolf

 

[onthebus]

Rolf, I'm not sure. I asked the agent if they are desperate to sell and she said if they don't get what they want, they will hold onto it. But she recently sold another property of theirs, and the fact they have opted for auction + open to offers, makes me think they must be pretty keen. Apparently any offers submitted must be your best, as they won't negotiate back and forth.

Do you know (or anybody else) if with ANZ bridging finance, you have to have a contract already signed for a house sale or can it just be listed for sale and you are waiting (with bated breath, I'm sure) for a buyer?
Aside from bridging finance or a 3rd loan (in my case), is there another way I could do this?
I really appreciate all advice and comments - finance and number crunching does my head in, especially when I have very limited knowledge of how these things work (newbie on steep learning curve).

 

[Rolf Latham]

I really appreciate all advice and comments - finance and number crunching does my head in, especially when I have very limited knowledge of how these things work (newbie on steep learning curve).

take Aarons suggestion

Oick up the phone to a broker ( Aaron will do a good job im sure)

this remote diagnosis with bits of data will just make things more confusing for you

t
arolf

 

[Peter_Tersteeg]

Do you know (or anybody else) if with ANZ bridging finance, you have to have a contract already signed for a house sale or can it just be listed for sale and you are waiting (with bated breath, I'm sure) for a buyer?
Aside from bridging finance or a 3rd loan (in my case), is there another way I could do this?

If you're talking to ANZ, you're talking to the wrong people to determine maximum servicing. For people with multiple properties in the mix they don't rank very well at all.

Don't talk to lots of lots of lenders just to determine what their individual calculators yield as it'll damage your credit file. Take the advice already given and call a broker. It's very straight forward for us to figure out what you can afford with different lenders.

 

[onthebus]

Thanks all for your help - will do