Scenario for mortgage brokers.

[alwayscurious]

Hi there. back again. Not quite 6 months, but hey.
Been quite busy - interested to see the level of activity on the forums. Some tyrekickers around, but still the same old crew around as well.

Here's a scenario - wonder if any of the mortgage brokers would like to see if this is even a valid scenario
Dependants - 3kids
wife income 0
my income 85k (incl super)
2nd business income ~10k (try to keep a lid on this for time reasons!)
(business has ABN, for more than 2 years)

Current PPOR ~ 330 - 345K val, 144k loan
IP 1 (xcoll with current PPOR) 290-300k val, 180K loan
LOC 1 (personal) 20k limit, 15k drawndown
LOC 2 (investing) 116500 limit, 73k drawndown (most on deposit on ip 2)
IP 2 (under construction, total construction loan 328,500, not yet fully drawn down) Val when completed ~400k

Rental Income IP 1 295/wk
Rental income IP 2 360/wk (when complete)

Scenario: wish to buy PPOR 420K + ~10k costs

Do I absolutely need to sell Current PPOR? or not necessary? I am listing it anyway but want to be able to have some breathing room if it doesn't sell straight away.

willing to look at various options including I/O for PPOR, No doc or lo doc.

Discussion welcome. I am talking to my broker - but interested in throwing the net wider, to validate my results, and to help others in similar situation.
CHeers
a/c

 

[wanelad]

You have a broker working it out for you if this does not pan out then i am sure one of us online here would be willing to help by contacting us.

 

[Qlds007]

As Wayne mentions you current broker is armed with all of the facts and if he is half good at his job will be able to provide you with a recommendation.

Why not post his suggestions once he has come back to you and us other brokers can comment.

He does have the slight advantage of having all of the information.

 

[BV]

Hi Alwayscurious

Anything is possible but you will need to ask yourself
if the old place is worth keeping.

If you don't sell, the new PPOR will be costing you $600/week
which under normal circumstances would be impossible to manage.
If you sold the old PPOR your interest payment on the new PPOR will drop down
to $290 per week which is manageable.

So keeping the old PPOR will cost you about $300/week or $15K per year.
For it to be worth keeping the value of the old PPOR value will have to go up by more
than $24K per year or 8% minimum.
8% was achievable in previous years but I don't know if that will continue for ever.
I doubt that it will.

Additionally, IMHO you are putting yourself at risk
as you have family with kids and only 1 income.

Cheers

 

[alwayscurious]

Update.

Hi there. A quick update.


Thanks BV for the risk assesment.
I agree it's risky. Especially if we kept current PPOR. We made some decisions and decided to NOT sell current PPOR.
We also have some other plans in place to mitigate risk., but I digress - that's not the question I am currently trying to evaluate here.

Update to scenario:
The current PPOR was put on the market and sold very quickly. Scary quick in fact. Despite the facts that we were asking the highest price in the street - it sold 2 days after listing.

It broke the record in the street by 15K (previously set 2months ago) and sold for 1K over asking price.

Financially / Logically this - a great result, and "gut feelingly" is confirmation of what we are trying to achieve.

---

So the scenario is NOW:
Current PPOR ~ 330 - 345K val, 144k loan SOLD 346K

IP 1 (xcoll with current PPOR) 290-300k val, 180K loan
LOC 1 (personal) 20k limit, 15k drawndown
LOC 2 (investing) 116500 limit, 73k drawndown (most on deposit on ip 2)
IP 2 (under construction, total construction loan 328,500, not yet fully drawn down) Val when completed ~400k

Rental Income IP 1 295/wk
Rental income IP 2 360/wk (when complete)

Scenario: wish to buy PPOR 420K + ~10k costs

will post updates as they come to hand.