Have to admit I've been so captivated by the stories on here that it has given me the final kick needed to get me started on "the journey". The final straw was reading through all the prior year threads in the investor psych section and realising there's no excuse for me sitting on the sidelines anymore.
I have my sights on a 2,1,1 in Western Sydney for around $295k renting for $360/wk.
Have a PPOR valued at $400k, P&I loan (1st mistake sorry) of $257k (variable), with a further $61k parked in an offset. So equity of $400*80% - 257 = $63, + $61 cash.
Would like to buy the IP using as little of my own cash as possible. 3 months ago a chat with my lender for a $330k property came up with "Use offset cash, top up PPOR by $26k with a split loan, borrow $260k secured against IP. Needless to say I was not thrilled about emptying my $50k pot of gold in the offset account.
So what is the correct strategy? Do I top up and split the PPOR loan to fund a 20% deposit, and then have an 80% LVR (240k loan) on the IP? Is that feasible to both avoid LMI and using my cash? Or is there a better way?
FYI for completeness, I am a single income with no dependants (SINK?), generating free cash of about $30k a year. Work for a big bad bank, currently paying an interest rate of 5.79%. Short term goal is to move to a bigger/better PPOR in 18-24 months and keep current PPOR as IP#2
thanks
Marty
I have my sights on a 2,1,1 in Western Sydney for around $295k renting for $360/wk.
Have a PPOR valued at $400k, P&I loan (1st mistake sorry) of $257k (variable), with a further $61k parked in an offset. So equity of $400*80% - 257 = $63, + $61 cash.
Would like to buy the IP using as little of my own cash as possible. 3 months ago a chat with my lender for a $330k property came up with "Use offset cash, top up PPOR by $26k with a split loan, borrow $260k secured against IP. Needless to say I was not thrilled about emptying my $50k pot of gold in the offset account.
So what is the correct strategy? Do I top up and split the PPOR loan to fund a 20% deposit, and then have an 80% LVR (240k loan) on the IP? Is that feasible to both avoid LMI and using my cash? Or is there a better way?
FYI for completeness, I am a single income with no dependants (SINK?), generating free cash of about $30k a year. Work for a big bad bank, currently paying an interest rate of 5.79%. Short term goal is to move to a bigger/better PPOR in 18-24 months and keep current PPOR as IP#2
thanks
Marty