hello all,
First of all I would like to thank everyone for this forum and the wealth of information everyone has/shares.
Heres our scenerio. My wife and I work and have combined income of approx. 120k. We have decided to buy another property in a nicer area and have found a 1940s cottage that requires a little work and will certainly increase in value (this is what we are hoping anyhow), with a bit of elbow grease and some good ideas. So we bought it for 300K.
We went to the bank and refinanced our existing loan. We did owe 180k and the house was valued at 260k, thus we had 80k equity. The banker did the financing for us and juggled the figures around and we now have two loans, one loan for ppor at 270k PandI, and the investment loan at 243K and IO. Botht the loan are currently at 5.96%. WE have just found tenants today after one week on the market, and they have agreed to pay 270 per week for our IP, mind you we have to take PM fees from this.
We feel as though for the last few years, as our incomes were good, we have let a lot of money just slip through our hands. So this is why we decided to buy another property. And having three children we are hoping to help them out in the future as well.
We have done some figures and think that we will have to put 125 per week at the IP, this will allow for a bit extra as well. We would like to possibly purchase another home in the next few years, if everything is still going well. We believe and hope that our new house will have a fair bit of equity in the next couple of years. So if we come to the stage when we want to purchase again, do we use the equity in our PPOR for the next home?
Another question is, does it come a time when you have to look for homes that you are neutral CF, or +CF, due to issues with serviceability?
Another question is, if we have a bit of extra money or tax return money, would it be wiser to put it at the PPOR which is PandI, or the IP which is IO?
We are going back to the banker on thursday and I am going to ask about the LOC and offset account, as I have read quite a bit about them of late.
Does anyone have another recommendations on either of these?
Thanks for any input/advice, its greatly appreciated.
Andy
First of all I would like to thank everyone for this forum and the wealth of information everyone has/shares.
Heres our scenerio. My wife and I work and have combined income of approx. 120k. We have decided to buy another property in a nicer area and have found a 1940s cottage that requires a little work and will certainly increase in value (this is what we are hoping anyhow), with a bit of elbow grease and some good ideas. So we bought it for 300K.
We went to the bank and refinanced our existing loan. We did owe 180k and the house was valued at 260k, thus we had 80k equity. The banker did the financing for us and juggled the figures around and we now have two loans, one loan for ppor at 270k PandI, and the investment loan at 243K and IO. Botht the loan are currently at 5.96%. WE have just found tenants today after one week on the market, and they have agreed to pay 270 per week for our IP, mind you we have to take PM fees from this.
We feel as though for the last few years, as our incomes were good, we have let a lot of money just slip through our hands. So this is why we decided to buy another property. And having three children we are hoping to help them out in the future as well.
We have done some figures and think that we will have to put 125 per week at the IP, this will allow for a bit extra as well. We would like to possibly purchase another home in the next few years, if everything is still going well. We believe and hope that our new house will have a fair bit of equity in the next couple of years. So if we come to the stage when we want to purchase again, do we use the equity in our PPOR for the next home?
Another question is, does it come a time when you have to look for homes that you are neutral CF, or +CF, due to issues with serviceability?
Another question is, if we have a bit of extra money or tax return money, would it be wiser to put it at the PPOR which is PandI, or the IP which is IO?
We are going back to the banker on thursday and I am going to ask about the LOC and offset account, as I have read quite a bit about them of late.
Does anyone have another recommendations on either of these?
Thanks for any input/advice, its greatly appreciated.
Andy