Thinking of 2nd Property

I have been living in my first home now for nearly 6 months and I would now like to see if it would be possible to get a 2nd property. I would like to hear feedback from members, especially experienced people.

My situation details:

Current property: Living in a cheap home purchased for less than $200k in small town, NSW. Home has been partly renovated and landscaped since I occupied it.

Employment: Self Employed with 2 years returns showing profit of around $60k per/y

Finance: I have paid an extra 9k in the offset account which is available to withdrawal with around $4k in available savings.

I would like to use a small deposit of $10k on a property.

The property I would prefer is something in the 300-400k price range and this would be renovated quickly (paint & gardens etc) and then rented out after 2 weeks of renovating (by myself).

This property would ideally be suited as my own PPOR in the future but I will continue to live in the current (cheaper home for sometime).

The house I would like to buy would be able to fetch a rental price where the rent money would be enough to actually pay the mortgage off over time although it might be sold in 5 years etc.

My current loan is very affordable which is why I have been able to pay nearly 10 k in the offset account in 5 months so I could even afford to pay the monthly payments for the next home as well although that would only happen while waiting for tenants and renovations.

My current loan is with my main bank but I was also approved at the time for a much higher loan by another bank which is who I plan to use this time. I still have the letter which offers me the finance and I will probably use the mortgage broker who processed this back then.

The first property was financed with a high deposit and FHOG.

I think this is a good time to go ahead with this for several reasons. I have probably left out a few details which I will think of later.

So with that information, what do you think my chances are off getting approved for a loan on another property with only 10k deposit and no assets?

Can you offer any advice etc.
Hi monsoon,

Your borrowing exposure will depend on how small a town you live in.

What is your postcode? If you don't want to openly post it, feel free to PM me.

You also say you were approved for a much higher amount at the time you purchased your PPOR? How much more are you talking about?

It is hard to advise without knowing alot of things like income and amounts already borrowed etc.

Have you tried going back to your original broker? They should still have all of your info.:)

Regards JO
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Hi JO, thanks for your reply. I don't mind sharing my details, my post code is 2324, Raymond Terrace NSW. The amount I was approved for by the Commonwealth Bank was about $350k but was on the basis of me putting in 20k + FHOG & was for my first home which I now have as I went with the other bank I use where I only borrowed just over 100k for this house + interest. I haven't gone back to the broker yet but this is what I will do soon.

As you mention it depends on the place I live in now, would this mean they will revalue the house I have now before I get approved? If that is the case then I guess I should complete renovations etc here first?
Hi Monsoon,

It seems to me you are right to go!:D

I was concerned when you said you lived in a small town but Raymond Terrace is fine.

You sound like you have more than enough equity. As long as your income matches up and you can service more debt you shouldn't have a problem!

Call your broker and go for it.:)

Regards JO
One other thing I would like to clear up... will the bank want to get a valuation on my home I have now? If so I guess I should get as much renovations completed.