On the road to my first PPOR :)

Found a decently priced apartment in South Western Sydney (Cabramatta)
Put down a deposit yesterday, and now in the process of getting the necessary inspections done. :)

Purchase price was $162.5k.
Kitchen will need to be renovated (I'm hoping to get this into a nice and modern state for ~$3000)
Bathroom, I'm looking at a nice polishing and probably replace the toilet.
I'm hoping this can automatically lift the value of the apartment to ~$180k :D
Rental yield, unfortunately, isn't much of a performer... :(
But I guess the experience of owning my first property will be more overwhelming. :p

Currently seeking finance with Ratebusters as they appear to be reasonably well priced compared to other institutions.
Does anyone have any experience or he-said-she-said's about Ratebusters?
The only thing I can really fault them on are their initial fees, but over the life of the loan the amount saved on interest should more than balance that out.
One thing I'd like some suggestions on would be whether or not to split the loan or not? (No splitting fees if the splits are put forward during application stage)

Cheers,
David
 
Rental yield, unfortunately, isn't much of a performer... :(

If you're living in it yourself, that doesn't matter as much.

The only thing I can really fault them on are their initial fees, but over the life of the loan the amount saved on interest should more than balance that out.
One thing I'd like some suggestions on would be whether or not to split the loan or not? (No splitting fees if the splits are put forward during application stage)

How do you expect to benefit from a split loan? If it's a PPOR and you can still save, I suggest looking into an offset.

If I'm reading this right they're fully-securitised lenders? Be aware that their rates might not always be lower. Look at RAMS.
Alex
 
Check out their break fees as well.

If you are going to occupy then rent out later consider an offset account and go IO. It is worth paying a marginally higher rate with a regular bank to have these things.

If you are planning on paying down the loan then do so via the offset. This money is available to use for your next PPOR with no tax penalties. If you are a saver then this is potentially worth more than a basic ratebusters rate.

Cheers,
 
I will eventually rent it out, that's why I'm thinking it might be worthwhile splitting the loan.
The ratebuster loan has a 100% offset account, and my plan was to salary credit the account so as to offset as much interest as possible.

From what I can see, the loan itself has quite a number of features.
No ongoing fees, offset account, redraw (no fees), ATM, eftpos, cheque book, internet, telephone banking weekly, fortnightly or monthly payments..
The absence of in-person banking doesn't faze me as I prefer to to everything online (and there's always the phone if I really need to speak to someone).
 
I will eventually rent it out, that's why I'm thinking it might be worthwhile splitting the loan.
The ratebuster loan has a 100% offset account, and my plan was to salary credit the account so as to offset as much interest as possible.

I don't understand that bit about the split loan. An offset will definitely be good if you plan to rent it out eventually, but what how do you think a split loan will help you?
Alex
 
I would put some thought into what Simon is saying with the interest only - not only will it free up some money - small but some - that may help you get some work done on the unit sooner rather than later. Help you get into the next one faster. But Congrats and enjoy :)
 
I don't understand that bit about the split loan. An offset will definitely be good if you plan to rent it out eventually, but what how do you think a split loan will help you?
Alex

Well... I don't know what I was really thinking anymore... :confused:
I had some kind of idea that if I had a split loan with a portion fixed, that would help with regards to tax benefits when I rented out (it's possible that this unit will still be -ve geared by that time).
Or instead of splitting, should I just convert 100% into a fixed rate?

I guess the split would be more for my peace of mind that part of the repayments will be fixed for a period?
I'm still figuring things out, so bear with my awkward ideas/directions... :eek:

But this loan definitely has an offset account (which I'm planning on organising my salary to be deposited into).

Thanks for the encouragement/advise guys. :)
Simon, I never thought of using the offset account in that way, that's great!
 
Well... I don't know what I was really thinking anymore... :confused:
I had some kind of idea that if I had a split loan with a portion fixed, that would help with regards to tax benefits when I rented out (it's possible that this unit will still be -ve geared by that time).
Or instead of splitting, should I just convert 100% into a fixed rate?

I guess the split would be more for my peace of mind that part of the repayments will be fixed for a period?
I'm still figuring things out, so bear with my awkward ideas/directions... :eek:

Splitting the loan between fixed and variable gives you a fixed portion and peace of mind from that. That makes sense. Fixed or variable has no direct benefit with regards to renting it out.

That's why I asked your reasoning behind the split loan. If you're saying you want the peace of mind of fixing part of the loan, that's fine. I didn't understand how a split loan would benefit you when you change it to an IP.

Having a fixed loan doesn't help with regards to tax benefits. What it may do (if variable rates are higher in the future) is keep your interest rates lower than they would have been if you'd gone for 100% variable. The tax benefits are incidental: it's about how much interest you pay.

Having an offset, especially used as Simon outlined (basically, save money into it as opposed to paying off the loan itself) will definitely help you if you plan to change it to an IP.
Alex
 
Well.. settlement is scheduled for tomorrow! *woohoo*
After much calling around with the original lender I was planning to go with, I ended up having to apply with CBA because I was becoming desperate for finance (my banking is with them so I didn't need all the other documents Ratebusters was asking for).
So in less than 1 week, my loan was approved and ready for settlement with less than a day before the 'agreed' settlement date (the solicitor I was recommended is driving me NUTS! with his lack of communication)

I can't wait until tomorrow... settlement will be over and I won't have to deal with this guy ever again. keys to a new property and a nice xmas present for myself. :)

I will be doing a final inspection this afternoon... hoping for the best!
Any tips or recommendations to look over during my last once over of the place?
What should I do if I find anything wrong?
 
Congratulations on your first purchase! I found the whole process of buying my PPOR a bit daunting while doing it and unfortunately seemed to have a solicitor like yours - not so good at the whole communications process! :mad:

Anyway, after WBC lost my signed loan docs and FHOG grant paperwork and I had to extend settlement by a couple of days - it all worked out in the end! :D

I too organised a pre-settlement inspection and not really knowing what I was checking just made sure that the property was in the same condition it was when I agreed to purchase it - ie no 'new' holes in walls, fixtures that were agreed to be included were there and basically that it was clean and tidy! I would imagine if you find something wrong then you would speak to your solicitor and definately do so before settlement is complete. I'm sure that there are more experienced posters on this forum who can offer advice if I'm wrong or the process is different!

Finally, congrats once again! :D
 
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