is there a loan out there for me?

[Belu]

Looking to buy in Feb of next year and will be buying my first property as an IP. Will be on $44k + super and have about $15k in savings. Savings will be about $2k/month on wage which is 66% of take-home ($3019).

Staying at home initially so low living expenses, and looking to buy for about $250-300k. Can borrow about $240k on wage or $300k with $200/week rent according to Westpac.

Will be wanting to borrow 105/6% loan or possibly 100% (as i could just cover costs) but would prefer 105/6% and then use my cash to cover shortfall in the first year.

Based off the above with a clean credit history, would banks lend say $290k to cover a $275k property? I would also rather lock in rates for about 3-4 years (wont have enough equity to be able to draw down before then anyway) so happy to let it sit there.

Any thoughts please?

Cheers

 

[Rixter]

Providing you meet DSR & have sufficient equity banks/lenders will allow you to borrow 106% of the purchase price.

I would strongly suggest you contact an IP savvy mortgage broker and run your personal situation past them.

Im sure they will be able to help you.

Hope this helps.

 

[mortgageman]

Hi Belu,

Sorry to say the rates are quite a lot higher for 105/106% loans and the serviceability calculators are quite brutal. I haven't done the full numbers, but I think you will be struggling to borrow $290k on your current wage with one of these facilities. Furthermore, unless you are on a very high wage and so open to strong negative gearing benefits there is not much sense in taking one of these loans out. I would recommend saving some more money for a deposit before purchasing.

Kind Regards,

Cameron Perry
Perry Financial Strategies

 

[Rolf Latham]

Hiya

id have to agree with Cameron

ta
rolf

 

[Rixter]

What about using part of your parents place as security on a 106% lend?

Chances are you are going to inherit it down the track anyway. Why not get in early?

Maybe food for thought.

 

[Modal Harmony]

Hi Belu,

Agree with Rixter that a good mortgage broker is the way to go. Having a face to face chat with them will help a lot.

Not sure if I agree with the comment though to use parents' place as security, unless you have really good relationship with them. In general, financial dealings with relatives can be a source of angst if you have different philosophies of wealth creation.

 

[Lia Hayes]

Hi Belu,

I tend to have a different view to the boys on this one. I do not advocate in any way shape or form taking out a loan that will put you in financial hardship, if you can't service the loan, you shouldn't be taking it out.

However, if you can repay the loan comfortably, I believe there is a place for the high LVR products out there, in some circumstances.

I know of at least two products where the rates are quite reasonable for this LVR and the fees low, so they are out there.

While it is always great to have a deposit saved for your first property, I personally would have no issue in using one of these loans to get into the property market initially. Houses are moving fast in most areas, and if you buy in a high growth area, you would be able to refi to a mainstream lender in the not too distant future at a lower LVR when values permit.

Again, I don't advocate getting yourself into hot water financially if you can't afford a property, but even buying a lower priced house or a unit as your entry into the market may be an option?

Lia

 

[artemis]

hi belu,
while i waited to build up a deposit, housing prices kept skyrocketing. i would of been better off borrowing 106% and paying it off quicker than the position i am in at the moment. if i bought the same house a year ago, i would of saved $100,000.
i feel poorer for it.