unsure of options

[Family Man]

Hey all,

Bit of background first. I'm 23, married, 3 kids (1x 4yo + 2 x 4mnth)
Been renting my dads house for 4 years, $350/week (I pay $250 my twin brothers rent a room each downstairs)

I've always had the desire to renovate a dump, but never had the means, single income ~$60k. over the last 8 months I have been studying/training and now have a new job and earning upwards of $95k (I've projected +$110k)

I'm really just wanting to get into the real estate game.
Eventually I want to have several IP's that are close enough to paying themselves off.
Although at the moment locally rent is dropping a fair a bit but property price doesn't seem to be following suit.

I have spoken to comm bank (my normal bank) and they said in my current situation I am failing their 'assessment' so a bit r deflated at the moment. 3 Dependants single income not the best investment for a bank.

Oh and I have 20k savings, on a fairly loose budget, plan to put away $800 f/n

 

[Family Man]

Realized I didn't really ask a question.
Basically I'm just after opinions/guidance. All the bank told me was 'no'
Am I better off just paying dad's house off like I now and saving?
I feel like I'm pursed for time even though I'm only 23.

 

[Corey Batt]

Speak to a broker regarding your situation. Whilst you may not have been suitable for CBA, they are a lower to mid range lender with regards to serviceability. You may very well be able to borrow with another lender, or at the very least know your current situation in depth and the things needed to be done to enter the market.

Using the rough numbers you have provided, it looks like there's definite potential, BUT you'd need to provide full info to get exact figures.

Outside of borrowing, good work work on starting your investment journey by investigating what is required to get started.

 

[Redom]

Hi Family Man,

Congrats on your promotion - that's a pretty hefty pay rise.

I've just had a quick play of those figures (95k income, 3 dependants), and the numbers range from around 250-350k in borrowing power for your own PPOR. The deposit may be a problem too, but there should be options available. Obviously i'm making a whole lot of assumptions, but that's just a general guide.

As CJay mentioned, its a good idea to speak to a broker. They'll have access to multiple lenders and should know a range of different bank policies in regards to your situation. When one bank says no, it doesn't mean they all will.

Also in the current lending environment, most people I talk to are always positively surprised to find out how much they can borrow.

Hope you will be too! Goodluck.

 

[Jamie M]

Hiya

Don't feel too deflated - CBA is just one lender, there are more out there that assess borrowing capacity differently.

Speak with a decent broker about your circumstances.

Cheers

Jamie

 

[Colin Rice]

If you stay at your Dads then rental income can be added to your 90k.

This can make a big difference combined with potential tax benefits applied within lenders servicing calculators that vary from bank to bank.

 

[willair]

Realized I didn't really ask a question.
Basically I'm just after opinions/guidance. All the bank told me was 'no'
Am I better off just paying dad's house off like I now and saving?
I feel like I'm pursed for time even though I'm only 23.

If you are paying off your Dads investment,is your name on that title maybe ask your Dad to have your name on the title that way with 20k
and the title change,it would be a different story..imho..

 

[Family Man]

Congrats on your promotion - that's a pretty hefty pay rise.

I've just had a quick play of those figures (95k income, 3 dependants), and the numbers range from around 250-350k in borrowing power for your own PPOR. The deposit may be a problem too, but there should be options available.

As CJay mentioned, its a good idea to speak to a broker.
.

Thanks Redom,
Complete career change, civil design/draftsperson to network controller (trains)
95k is on the low end (I made $4750((typical)) pre tax last fortnight) but I'm not wanting to borrow top dollar anyway.

Hiya.

Speak with a decent broker about your circumstances.

Cheers

Jamie

Makes sense, thanks

If you stay at your Dads then rental income can be added to your 90k.

This can make a big difference combined with potential tax benefits applied within lenders servicing calculators that vary from bank to bank.

This was my first plan, but rent seems to be dropping by the day here, few people I know have dropped rent from mid/high 300 back to 300 even, and those places aren't too bad.


Thanks for the input guys, hey Redom, what exactly do you mean by the deposit will be a problem?
I already like the idea of tax benefits, $1400 tax f/n makes my face hurt.

 

[redwing]

Your paying off your Dad's house or renting it with your brothers

 

[Family Man]

If you are paying off your Dads investment,is your name on that title maybe ask your Dad to have your name on the title that way with 20k
and the title change,it would be a different story..imho..

Meaning I could use part of this place as equity???

$190k is owing on our house, house 2 doors down for sale for $370k
So maybe a conservative estimate value of 330k, 750m2 5bed 2 bath.

Might have to have a chat to the accountant in the family about adding my name to title.

 

[Family Man]

Your paying off your Dad's house or renting it with your brothers

Haha as it stands now, I am renting and my brothers are living with me. I'm not sure I fully understand the difference between renting and paying if someone's investment? :S

Dad has stoped working at the moment so things can probably change if I know what would be best.

 

[willair]

Meaning I could use part of this place as equity???

$190k is owing on our house, house 2 doors down for sale for $370k
So maybe a conservative estimate value of 330k, 750m2 5bed 2 bath.

Might have to have a chat to the accountant in the family about adding my name to title.

That would be the first step talk to a Accountant maybe one that owns invests in property,,there are a few in this site internet based that are very good and saved me a lot of money over the years..good luck..

 

[Terry_w]

Realized I didn't really ask a question.
Basically I'm just after opinions/guidance. All the bank told me was 'no'
Am I better off just paying dad's house off like I now and saving?
I feel like I'm pursed for time even though I'm only 23.

about 20 years ago I looked at my first property - near oxford street Sydney, small unit for $85k. I went to my bank who said no, so i gave up. If only I had asked another lender - I would be rich by now!

 

[willair]

- near oxford street Sydney, small unit for $85k. I went to my bank who said no, so i gave up. If only I had !

Just from the sidelines Terry what would a unit in that prime location be worth now..

 

[Terry_w]

Just from the sidelines Terry what would a unit in that prime location be worth now..

I should try and find the address and search. It was a bachelor - probably $500k at least. It would have been almost positive geared from the begining too

 

[willair]

It would have been almost positive geared from the begining too

Thanks most of those properties were like that in those years,the only problem was the Bank Manager..

 

[Redom]

Thanks for the input guys, hey Redom, what exactly do you mean by the deposit will be a problem?
I already like the idea of tax benefits, $1400 tax f/n makes my face hurt.

$20,000 may not be enough or reduce your lender pool significantly, depending on what your looking for of course.

If you can access the FHOG and avoid stamp duty, you should be fine and open up a large pool of lenders available to you though.

 

[Family Man]

$20,000 may not be enough or reduce your lender pool significantly, depending on what your looking for of course.

If you can access the FHOG and avoid stamp duty, you should be fine and open up a large pool of lenders available to you though.

From what I understand FHOG is for a new dwelling only? No way I could afford to build around here. 200k for basic lockup, land out of flood 180k plus

 

[Corey Batt]

From what I understand FHOG is for a new dwelling only? No way I could afford to build around here. 200k for basic lockup, land out of flood 180k plus

The stamp duty concessions will certainly help though. If you keep to a 250k budget max, you can scrape by. Renovate, access equity from there, rinse and repeat. There's light at the end of the tunnel.

 

[tobe]

. All the bank told me was 'no'

Just as an aside, this is what keeps me in business. I never say no to a client, only advice on how to get to yes.