Newbie needs advice

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From: Darlene B


Hi, I am a newbie here after reading Jan's books and buying the PIA software.

The problem i have is that i really want to buy my first investment property but only have 20% equity in my house. The software says i can afford a property with only 8 a week going out, and huge tax breaks (yea!).

How can i afford to buy a property with such low equity? How do i go about re valueing my house? Where can i go for advice?

Thanks...
 
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Reply: 1
From: J Parker


Darlene,

My first stop would be a reliable finance broker and there are quite a few who frequent this forum who would be happy to help you. Rolf Latham is terrific and gives balanced advice, amongst others. It's a matter of finding someone who you feel comfortable with. Have fun!
Cheers, Jacque :)
 
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Reply: 2
From: Rolf Latham


Hi Darlene

20 % equity in your home "should" be enough to get you going provided that its in a capital city.

By refinancing the home loan to 90 % of the home's value, using capitalised mortgage insurance and a 95 % loan for the investment property youre pretty much in the swim. Much depends on your overall financial profile though, and such a deal can not be put together by most banks, except for the ANZ and to a lesser extent Bankwest and one or two others.

Seek the services of a good indepenent mortgage broker.

TA

Rolf
 
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Reply: 3
From: Geoff Whitfield


Darlene,

I'd also check your equity against current price, not purchase price, if you bought the place a while ago.

There's been some good capital gain in many cities recently- if there's been much time difference, I'd ask for a real estate agent's appraisal as a starting point. If the difference is big, pay for a valuer's report (though some banks may actually accept a R/E appraisal, and reduce it- still giving you enough to borrow more).
 
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