Likely outlay on a $220k IP

[Paterson00]

Hi all,

I am currently trying to buy two houses, a PPOR and also my first IP in Oz. I am in need of knowing the likely costs to see if I can actually do both.

Do you know what my likely outlay would be if I was buying a $220k IP at 5%LTV including stamp duty and LMI?

I would be buying this after having just purchased a PPOR also at 5% LTV etc and that may be around the $430k mark.

My broker tells me that my outlay for the IP would be about $29k if I bought at $250k.

Many thanks

Paul

 

[j_p]

Stamp duty for WA can be found here

http://www.finance.wa.gov.au/cms/State_Revenue/Duties/Rates/Rates_of_Duty.aspx

Stamp duty, deposit and LMI are your main expenses

LMI - you can usually capitalise up to around 97% I believe so you may have to put in a little extra cash - speak to your MB.

Then there are transfers and legal fees along with a few other more minor expenses.

Building and Pest inspections are also probably wise.

 

[redwing]

5% LTV

Are you whacking in huge sums of cash?

 

[Paterson00]

No just 5% of each plus buying costs

 

[Rolf Latham]

Although I don't like bwa much, their 95 + unlimited capped lmi can be a Good outcome for someone like you.

It will allow you to take your limited savings and apply more of the cash to your non ded debt.

I'd expect you'd need less than 20 k to complete .....

You will need a decent credit score to make it fly though

Ta

Roll

 

[Paterson00]

Is BWA the Bank of Western Australia / "Bankwest"

Curious. I will look into that to see what I can find out and send the link of this chat into my broker.

Thanks alot.

Paul

 

[Paterson00]

I am struggling to find that product Rolf. Can you copy a link in here for me?

 

[Rolf Latham]

I am struggling to find that product Rolf. Can you copy a link in here for me?

Any of the bank west variable products support the policy.

If you have had any pre approvals done with your existing needs, it's less likely you will qualify for this one, because the dead pre approvals will drag your credit score through the mud

Ta

Rolf

 

[Paterson00]

Thanks Rolf,

I suspect we may struggle then. I doubt you have been following all of my early posts but we had initially been planning to purchase a block of land and build kennels as my wife has a dog walking and boarding business but we were declined finance as the block was deemed too high risk due to its zoning and some power lines nearby. As a result we have already had a knock back.

On this basis I am suspicious that we may be declined a mortgage for an IP since we are looking at buying the PPOR then and IP shortly after as you saw in another post. Might be smart to wait and hold off on buying that IP for a year after all.

 

[Rolf Latham]

A decline per se isn't any worse than a plain pre approval enquiry

Have a chat with your broker and take it from there
Ta

Rolf

 

[Paterson00]

Thanks Rolf,

we were not refused finance, simply that we did not meet the lending criteria. I have told the broker about this and she assures me this should not be an issue.

 

[Jess Peletier]

Hi Paterson00,

I hope this doesn't come across wrong, but is there a reason you don't trust the advice your broker is giving you? It seems like your second guessing a lot of the info you've been given and I'm curious (or nosey, perhaps! ) as to why?

That said, $29k does seem higher than necessary. Here's my rough and dirty numbers.
$2500 for settlement and inspections (might be generous), SD is $7305 Inc costs, 5% deposit is $12500 plus you might need some extra - say 1% to stay under 97% lvr in the event BWA won't look at you.

So that's around $25k.

 

[Paterson00]

Hi Jess,

yes it could be seen like that I guess but I am simply seeing if anyone has a better way of skinning a cat is all. The more methods the better.

I am told that we will only be able to go to 97%LTV (inclusing of LMI) on the PPOR and 95% on the IP.

Also I am reluctant to keep going back to my broker and bothering her with different scenarios since she has not had a penny from us yet and has looked at quite a few scenarios already. Is that wrong or should I expect to be able to go through a lot of scenarios with her?

 

[Jess Peletier]

Personally if it was me I'd probably prefer to go through the scenarios with the client myself, otherwise I'd have no opportunity to show them the difference between them and my reasoning behind my recommendations.

 

[Paterson00]

That's a good point Jess and I hadn't thought of that. Thanks for your input.