Salary - $35 K Increased to $47 K

[Alex P Keaton]

Hi

When I qualified for my $177 K loan with ANZ this amount was worked out using my $35 K pa income. How much do you think approximately would I qualify for now im on a $47 K pa income

$35 K = $177 K Loan

$47 K = $ ?


My ppor is worth $250 K and I plan to invest in an ip when my ppor is valued at $300 K


PPOR
Value: $300K
80% is $240K
Current Loan: $177K
Maximum additional borrowings $63K


IP
Value $270K
80% is $216K

Maximum Borrowings
From PPOR - $63K
One new property - $216K
TOTAL AVAILABLE: $279k

Now does this mean if I buy an ip for $279 K that I will have to get a loan for $216 K. Hopefully I would qualify. I would also want to borrow the stamp duty expense.

 

[Rolf Latham]

Hiya Kim

if you are going to borrow the lot incl costs you will need to borrow around say 285, with security split between the PPOR and new IP.

Putting aside for a moment what the banks will lend, how much a week can you out toward an IP pls

ta
rolf

 

[ianvestor]

$35 K = $177 K Loan

$47 K = $ ?

Hi, the simple answer using high-school algebra is $237,685.71

Of course, the banks aren't going to give you a simple answer

 

[Alex P Keaton]

My ppor is worth $250 K and I plan to invest in an ip when my ppor is valued at $300 K.

PPOR
Value: $300K
80% is $240K
Current Loan: $177K
Maximum additional borrowings $63K


IP
Value $270K
80% is $216K

Maximum Borrowings
From PPOR - $63K
One new property - $216K
TOTAL AVAILABLE: $279k

Here is what my debt to service ratio looks like if I were to buy an ip in about 2 years time

Hypothetical
Debt to Service Ratio


Monthly loan repayments
PPOR = $950
IP = $1250

= $2200


Monthly rent
= $1100

Gross Monthly income (includes 2nd casual job as well)
= $5400

DSR

2200/(1100 + 4300) =2200/5400 = 40% DSR


The banks wont lend to me unless my DSR is below 35%. Is that right??

 

[Alex P Keaton]

Hiya Kim

if you are going to borrow the lot incl costs you will need to borrow around say 285, with security split between the PPOR and new IP.

Putting aside for a moment what the banks will lend, how much a week can you out toward an IP pls

ta
rolf

I can afford about $200 a week


So is this how it works

Get a loan for $237 K

ppor current loan is = $177 K + draw down $63 K equity = $240 K


IP
$270 K purchase price

IP
loan = $270 K - $63 deposit = $207 K IP loan


So I will have to service
ppor loan = $240 K
ip loan = $207 K

Does this sound right. Im quite confused.

 

[RumpledElf]

You retwiddle it so the PPoR loan stays the same amount (although when we did it they put the two $600 bank fees on the PPoR loan) and all the new borrowings go on the IP loan.

Easier for the accountants if all the deductable debt is together. Which I had to explain to the bank last week when they tried to put our reno/subdivision loan on the PPoR loan ... idiots.

 

[Jamie_D]

Hi Kym

In simple terms if you have 2 properties worth say $300k + $270k you can borrow up to 80% or $456,000 with LMI.
Minus existing debt of $177k = $279k additional.
Obviously depending on banks formal valuations.

If you are currently earning $47k plus a proposed rental of 5% of new property or $13,500 pa then your servicing capacity is $187k unfortunately.
DSR is at 66%.

Have you thought about buying an off the plan property?
You can access additional equity to pay for 10% deposit now and settle in 2-3 yrs.

 

[Alex P Keaton]

Hi Kym

In simple terms if you have 2 properties worth say $300k + $270k you can borrow up to 80% or $456,000 with LMI.
Minus existing debt of $177k = $279k additional.
Obviously depending on banks formal valuations.

If you are currently earning $47k plus a proposed rental of 5% of new property or $13,500 pa then your servicing capacity is $187k unfortunately.
DSR is at 66%.

Have you thought about buying an off the plan property?
You can access additional equity to pay for 10% deposit now and settle in 2-3 yrs.

Do you guys think buying off the plan could be a good option for me? At least then if I pay the 10% deposit the value could increase until time to settle. But what would happen then if I cant service it? It would have to be something I would be able afford and service in the future if I bought off the plan.

Any advice?

 

[Rolf Latham]

OTP right now ..............

From this brokers point of view, where you dont know if you can finance the deal

Nah...........pass


ta
Rolf

 

[Alex P Keaton]

OTP right now ..............

From this brokers point of view, where you dont know if you can finance the deal

Nah...........pass


ta
Rolf

im thinking in about 2 years time not today

 

[tess85]

but in 2 years time your pay will hopefully have changed; and the valuations will come in with a diff. no! perhaps it's best to ask again at a closer time?

 

[Rolf Latham]

I must have misunderstood

I thought you meant buy today, settle in 2 years, rather than buy in 2 years time

ta
rlf

 

[Alex P Keaton]

Hi guys

I'm looking forward a couple of years. I know atm I cant afford to buy, as I have just bought a property. Just thinking about my next step and how I'll get there, and if I will be able to buy again in a few years.



Im eager to buy again but I'll have to be patient and whilst waiting save like crazy.

 

[Jamie_D]

The banks acknowledge that high density living is popular in big cities especially Melb, and as a result eager to fund these properties without the past restrictions or lower LVR's.

I think they are a good investment and a forced commitment for the future...

Most banks will not lend on properties less than 40sqm, so do your homework.

I have clients who are buying properties that will settle every 12 months for the next 3 years.

They're doing well!!

 

[Jodie701]

Hi Kim

Congrats on youy pay rise!!

 

[The Y-man]

I have clients who are buying properties that will settle every 12 months for the next 3 years.

They're doing well!!

Except when they go to settle and the banks suddenly change their minds?

Cheers,

The Y-man

 

[Alex P Keaton]

If you are currently earning $47k plus a proposed rental of 5% of new property or $13,500 pa then your servicing capacity is $187k unfortunately.
DSR is at 66%.

Hi

How about when I'm earning $55 K pa?

There is talk at work that if I complete a certificate at TAFE in the field I am working in I will earn more. An extra $7 K pa!! Will that help?

How much approx would I be able to service if I'm earning an extra 7 K pa?

I am also planning to get a casual night job perhaps 1 - 2 nights a week. So I could be earning $62 K pa gross.

What figures are we looking at, for servicability for:

55 K pa?

$62 K pa?


thanks for your help.


I'm finding i have to be patient waiting for my property to rise in value. I bought it in September and looks like i'll have to wait a while to see its value increase to the 300 K mark before I can invest in an ip.

 

[Alex P Keaton]

Hi Kim

Congrats on youy pay rise!!

thanks, i have been acting in the position for the past 6 months or so and the other week just had an interview for the job. Will know in about 8 weeks if im successful or not. There is a good chance seeing that there were a few positions going.

 

[Alex P Keaton]

In 2008 I was on 35 K pa. I got a loan for $177 k from ANZ.
Value of 1st (PPOR) property is now $260 K


In 2009 I was on $49 K pa and cross col with my 1st property to buy #2. Value of # 2 property is $210 K


I'm at 80 % LVR


Soon I will be on $ 55 K pa and in 2011 I'm looking to buy # 3.


I'm curious how much an impact an extra $6 K pa income is going to effect how much the bank will lend me?

An extra $30 K? maybe $50 K?

I'm hoping I'll be able to get something that is larger than 50 sqm this time. I dont want to have to put in a 20% deposit. I'm hoping to buy a property in the mid to high 200's.


Just looking back, thats not bad hey, going from a salary of $35 K pa in 2008 to $55 K pa at the end of this year. The salary range for the position goes from $55 K to 60 K pa.



thanks

 

[andrew_de_a]

do you work for the gubberment?