options what to do

[Emo21]

Reviewing our current situation currently owe $890000 split over 5 mortgages and 1 personal loan and a credit card with limit $20k.
PPOP bought 2003 for $183k and have done $100k renovation so now a 5 x2 estimate worth $500k
IP 1 bought 2009 for $277,500 renting for $320 pw(rental increase to $350pw in September) Estimated value now $300k

IP2 bought 2010 for 255,000 renting $350 pw Estimated value now $300k

Loans are a bit all cross collateralised due to funding for the second IP
But
loan 1 aussie 277k (IO) 7.6%
loan 2 CBA $244k (IO) 7.15%
loan 3 CBA $46689 (IO) 7.15%
loan 4 CBA $267,616 (IO) 7.15%
loan 5 CBA $78102 (P&I) 7.15%
loan 6 personal loan aussie for 5yrs (4 to go)


loan 2,3 and 4 revert to P&I in august

now with the loans reverting to P&I i am considering the next move we can
• Refinance loans and sort out cross collateralisation and get the best rate available with our current lenders therefore reducing any cost to refinance.
• Refinance loans and sort out cross collateralisation and get the best rate available with other lenders which might then incur LMI and increase the costs.
• Refinance loans and sort out cross collateralisation and purchase a positively geared property in port hedland estimate $720k with $1500 rent pw on a secured government lease with 5yrs to go with 12monthly rent reviews and the option for 1 yr extension
• Refinance loans and sort out cross collateralisation and purchase a lower costing house probably close to neutrally geared as possible.even look at a larger property with the idea so subdivide and conquer.




Any thought or rebuttals on the scenarios

 

[Aaron_C]

A bit hard to know without knowing your income....

 

[Emo21]

combined income of 118k before tax

 

[Aaron_C]

Seems that your serviceability will be an issue if you wanted to purchase another property (or if you wanted to refinance for that matter)

 

[Emo21]

Bur surely In the case of purchasing a positively geared property that its self takes care of the serviceability with extra to cash per week.

As for just refinancing my broker seems to think that's not a problem the only sticky thing is the restructuring to untangle the crossing

 

[Aaron_C]

Bur surely In the case of purchasing a positively geared property that its self takes care of the serviceability with extra to cash per week.

As for just refinancing my broker seems to think that's not a problem the only sticky thing is the restructuring to untangle the crossing

Nah. Banks only take 80% of rental income for servicing. You need a property that offers at least a 12% yield before your serviceability is not impacted.

Even for refinancing your servicing is borderline at best...

 

[sammmeee]

"Nah. Banks only take 80% of rental income for servicing. You need a property that offers at least a 12% yield before your serviceability is not impacted."



Thanks aaron that was something I always wanted to know..when does a property look after itself without relying on owners servicability...answer 12%

I saw in an API mag a young gun that has 7mill in IPs but I couldnt understand how he was able to make the bank loan more to him..but 12% makes sense now.

 

[womble66]

I saw in an API mag a young gun that has 7mill in IPs

"young gun" is this code for Nathan?

 

[Aaron_C]

"Nah. Banks only take 80% of rental income for servicing. You need a property that offers at least a 12% yield before your serviceability is not impacted."



Thanks aaron that was something I always wanted to know..when does a property look after itself without relying on owners servicability...answer 12%

I saw in an API mag a young gun that has 7mill in IPs but I couldnt understand how he was able to make the bank loan more to him..but 12% makes sense now.

Yep. But you also need to consider LMI and cash tied up as a deposit which will also hinder your future property acquisitions.

 

[sammmeee]

"young gun" is this code for Nathan?

No ...aah..might have been YIP..basically 23 and has loads of properties in port headland..the numbers and timeframe were extroadinary..

 

[wobbycarly]

No ...aah..might have been YIP..basically 23 and has loads of properties in port headland..the numbers and timeframe were extroadinary..

IIRC, he was a Crawford; the Crawfords are one of the REAs in Hedland.

 

[Rolf Latham]

Loans are a bit all cross collateralised

Like being a little bit preggo : )

What was the purpose of the personal loan

What is your PERSONAL serviceability situation like ? ie, not what the lenders think, but what do you know ?

ta'rolf

 

[Emo21]

yes and it has the back pain of being pregnant too.

The personal loan was a add on to the last IP purchase, to get the funds needed to settle the purchase.

As for personal serviceability as far as i am concerned its good. We dont splash out on major wastes and provide adequately for a comfortable life while being well insured.

At the moment we are considering looking for a new broker/advisor. Our current guy has been fantastic but he has over the years increased his business and its beginning to lose that personal touch.With a couple of more offices opening up he has become more office management and i believe his customer hands on approach is suffering.

Any advice on mortgage broker/planner in perth or interstate that doesnt mind dealing long distance. in the current situation will probably try to re jig the loans to stop the accountant have panic attacks at there structure and pay down some of the personal debt to facilitate future investment.