Rental getting knocked down - options to get into PPOR?

[christos]

Hi all

Looking for some feedback on best approach for this situation.

Reside in Sydney and currently renting and saving hard for deposit for PPOR - have 45K currently saved. Looking for house 3bd - budget up to 600K so still some ways to go yet but for now this is my end goal this year.

Unfortunately advised yesterday that current house next door has approval for a knockdown rebuild (which will start imminently so not keen to be around for that process).

Hence my options are:

• Move again - reluctant to do this and then get straddled with another lease
• Buy earplugs, bunker down and keep saving
• Try to get finance early so can purchase PPOR

On the last point am still a bit shy of min goal of 10% of budget (i.e 60K) so just a query if trying to get finance early in such a position is available.

Have IP in hunter - 211K loan at 90% LVR but little to no equity could be drawn from that at the moment due to downturn.

Currently on 125K a year.


Thanks

 

[mumbai]

If you plan to buy more investment properties down the line, IMHO do not put too much deposit on the PPOR purchase. Meet a broker (a lot of great ones on SS) and they should be able to guide you.

 

[D.T.]

Any other debts credit cards etc?
Any partner or dependant?

 

[S.T]

Do you work from home? Cant see why some noise from a knock down would affect you much if next door and you're not home during the day.

 

[norwoodman]

If you're allowing for up to 600k purchase, you might need a bit more than $60k allowing for stamp duty, LMI, conveyancing costs, and other fees.

 

[christos]

15K in cards.

In process of trying to save really around 80K to pay some of this down where can and to have some more as deposit to handle buying costs etc (or go lower budget - 500-550K although obviously this doesn't get you much at the moment).

Work partially from home as well a few days a week so the demo/rebuild will get annoying.

 

[christos]

DT - no dependents

 

[alexlee]

You're not really in a position to buy for at least 6 months, given those numbers. Six months then takes you close to Christmas, when everything gets delayed.

Move and get a 7 month lease that takes you into January.

Pay off the cards first.

 

[Brady]

What stage is the approval for the knock down?

Are they rebuilding 1 or multiple?

If subdivision is required could still be a little while before construction of the new property starts.

Demolition happens reasonably quick.

 

[christos]

Alexlee - agree. Better off to just move.

Am realistically another 6 months to get sizeable saving (of which would pay down cards first)

Even if went for finance today (at lesser amount), managed to buy a property straightway, and went through settlement then at least 2+ months away.

And the jackhammers will have well and truly arrived by then....

 

[christos]

Brady - demolition starts in next 2-3 weeks. Its a single dwelling after that - 2 storey/4bd - so a good 6 months of building I am guessing

 

[Mick C]

Reside in Sydney and currently renting and saving hard for deposit for PPOR - have 45K currently saved. Looking for house 3bd - budget up to 600K so still some ways to go yet but for now this is my end goal this year.

If you can save other $8-11k you be good to go for a 95% + LMI lend if you really wanted to get into the market early.

Purchase: $600,000
Stamp duty NSW: $22,490
5% Deposit: $30,000

Total outlay: $52,490 + $5,000 buffer as min

Other option is for the adelaide bank funding, where they can give you an $20,000 side loan at home loan rate to pay for the stamp duty ( Still available with onur funder, but it looks like it will be pulled back towards the end of the year- so get in early if required)
Max lVR with Adelaide is 95% including LMI

Purchase: $600,000
Stamp duty NSW: $22,490 ( $20,000 covered by Adelaide bank)
8% Deposit: $48,000
LVR: 92% + LMI = 95%.

Total outlay: $50,490 + $5,000 buffer as min

----

Your borrowing capacity is ok.


Cheers

 

[christos]

Thanks Michael for the breakdown - with aggressive saving over the next two months will try to get to the 60K mark