Would a banks loan me money for my first IP?

M

Mr. T

We've decided that we're going to enter the property market in the next 6-12 months but I'm not sure we'll qualify for the loan we're after.

My wife isn't working ATM and wont be for at least the next 6 months but probably much longer.

- I'm 54 years old, earing about 50,000 pa.
- The house we live in is worth about 300k and we owe 100k on it.
- The repayments are 1200 per month
- We're hoping to borrow a little over 300k and rent out the house we buy
- We have about 30k saved up as a deposit

In the coming weeks we're going to talk to a bank/mortgage broker about our options but I was curious to see if things are looking likely or not.

I'm sorry if I left out any important information, I'm a property beginer.

Thank you all in advance for your replies. :)
 
Make sure you talk to a good mortgage broker, some good one's on here so have a search, they won't give you 100% advice just in case, but they can lead you in the right direction.

When looking at a loan the banks will also take into account not just your salary but, rental income, expenses, fees etc. But make sure you check with a good broker first, they can check out which bank you should go with to get the best choice for you.

Are you planning on getting a property manager at all, or manage the property yourself?

If you're planning on getting a PM, do some research before investing your property with them, and sometimes you may discover financially, you're best on your own, but best to go with a PM in the long term.

Hope that helps!
 
Yes, thank you for your help.

To be honest we haven't really talked about property managers yet. Personally I'd like to have someone else lease the IP but have us manage it with inspections and maintenance. Since we'd only have the one property it wouldn't be too hard to be hands on and available if the place or tenants needed anything but then it depends if there's a lot of legal red tape that you're better off having a professional navigate through.
 
Well PM's for me would come in at a later stage too.

The only problem with managing a property on your own is if any problems arrose with the tenant. Sure you can sort it yourself, but i agree, i would rather not give myself such a headache, but then again i want to be a real estate agent..:(
 
You two are funny!

Hi there Mr T.

You have plenty of options as far as I can see.:D

Was there a particular loan product you were after?

Regards JO
 
josko said:
You two are funny!
Click to expand...

LOL! Barrel of laughs I am sure.:confused:

BTW, Mr T, Jo is one of those brokers that hang around the forum. There are some more too. From my experience there is a world of difference between a good broker and a bad one. I'd start your search for one right here, on the forum. There are some really good ones here and don't worry about distance. I'm in NSW, but use one on the Gold Coast.
 
josko said:
Was there a particular loan product you were after?
Click to expand...

We're looking for a principal and interest loan.

None of this fancy stuff where you only pay the interest and then sell the property at a gain. We're hoping to hold this IP for into retirement and pass it on to our kids when our time comes. Making a dollar buying and selling isn't for us.

Other than that I don't know much else about the kinds of loans available to us.

Is there anything you can recommend I ask about, josko? And is the fact that I'll only be in the work force for another 11-16 years going to be a problem?

Thanks for your help.
 
skater said:
There are some more too. From my experience there is a world of difference between a good broker and a bad one. I'd start your search for one right here, on the forum. There are some really good ones here and don't worry about distance. I'm in NSW, but use one on the Gold Coast.
Click to expand...

Good to know.

Thank you for the information.
 
Mr. T said:
We're looking for a principal and interest loan.

None of this fancy stuff where you only pay the interest and then sell the property at a gain. We're hoping to hold this IP for into retirement and pass it on to our kids when our time comes. Making a dollar buying and selling isn't for us.
Click to expand...

If I could make a suggestion?

Since you still have a mortgage on your own home, why not go for Interest Only for the time being and pay the extra amount that would make the Principal componant into your existing mortgage. You would still be paying the same out off each and every month, however it would all come off of your home, not your investment. THEN, after the home is paid out, you can tackle the loan on the investment property.

The loan for the investment property is tax deductable, whereas your home is not, so it makes financial sense to make all principal payments off of your home first.
 
Just be aware Mr. T, that Principal and interest loans will effectively affect your ability to purchase more investments, which affects your "leverage"

Take this advice on board
Do you really want to pay for your own investment(s)?
Wouldn't it be nice if someone else would pay it for you?

I recommend reading some books on the subject before purchasing your investment property.
 
hi Mr T,

I have quite a few products that will suit you and probably should speak to you and get a few more details. Fee free to email me on [email protected]

For Instance:

- A Product with NO ANNUAL fee, just a one-off Application Fee (Most Packages the Banks offer charge you an Annual Fee of approx. $395.)

- A Discounted Interest Rate of 5.28%

- A Line oF Credit with the ability to pay off your loan quicker.

This product is designed specifically for customers wishing to pay off their debt faster.

Regards Jo
 
investor2009 said:
Just be aware Mr. T, that Principal and interest loans will effectively affect your ability to purchase more investments, which affects your "leverage"

Take this advice on board
Do you really want to pay for your own investment(s)?
Wouldn't it be nice if someone else would pay it for you?

I recommend reading some books on the subject before purchasing your investment property.
Click to expand...

Thank you for your input.

I certainly see the advantages of interest only loans but with our IP we'd be looking at buying and holding for the long term and we're really keen to have no/little debt asap.

At the end of the day we just wouldn't feel comfortable if we weren't lowering our debt.

Having said that, getting an interest only loan while we're paying off our residence would be a smart idea, as skater suggested previously.
 
Hi Mr T..Welcome on-board!!
Can I recommend the following thread without seeming condescending? I am a similar age and know exactly how u r feeling about the investing side of things.
http://www.somersoft.com/forums/showthread.php?t=9652

It will change your thinking about many, many things after about a year or two.

Personally I would start with Rich Dad, Poor Dad (on the list).
Nearly all the books will be at your library.

Cheers,
JB
 
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