Unfortunate, but a sign of what may be out there in Perth (at least). (from OzB). I hope this guy's parents are able to resolve the situation without too much damage. I feel terrible for them, however, at the same time, feel that we also need to take responsibility for our own finances.
Ah this breaks my heart, i hope they come out the other side ok. ON a side note though Im seriously wondering how a 5 year old house needs 15-20k done on landscaping??? Also if the old boy is only pulling in $30k - $50k pa surely he would be better suited to a career change? Driving a truck, forklift, there are many PAYG jobs out there that would net him/them a better income. Even working at bunnings with the Mrs would get him a more consistent income!
Depands on their circumstances, they could potentially rent somewhere cheap, rent out the house and refi as investment property and extend the loan term. This could actually help them get it through and at least do not need to sell at this current market.
This doesn't add up. They bought 5 years ago and IO comes off next year (6 years) and there is 12 years left to run? That's 18 years. Unusual. I have looked at 4x2 recent builds in Beeliar and they are listed at mid 4's and up. Looking at sold properties there are a lot of sales in the high 4's to low 5's. It makes me wonder if they have had the house appraised or if they are guessing wrong? I hope it is just a misunderstanding and they are not in as much trouble as they think. Something that is concerning is that the dad lost hus job 3 years ago and doesn't seem to be have been able to find more work. That is going put any family under pressure. An option is to rent out the home and rent somewhere cheaper. That's not going to help much if the repayments are $2,800 per month. Still, market rent looks to be around $420 per week, so tenanted it would help them to refinance to 30 years P&I. I hope they get advice from a good mortgage broker before things get worse.
Looks like market rent would be around $420 per week. It certainly would not hurt their situation at this point
At their age I doubt many banks will write a 30 year loan even if for investment? The rental income won't come close to covering $2,800/month repayments, so you'd have to rent somewhere REALLY cheap to make that work. Could work for a few years if another IO period can be secured, but then you're just kicking the can down the road and praying for significant capital gains in the next few years - a risky option. I know if others in this same age bracket who have fallen into similar situations; seems that a lot of people out there have not been paying down debt and were basing their retirement plans on house prices doubling every 10-15 years...
Interesting. I remember @MTR saying there was a mini boom in Perth in 2013/2014. Free Suburb Profile report for Beeliar WA (6164) The median housing loan repayment is $2167 a month with the median price of 500k. Compare that to Campbelltown in Sydney with a 650k median and median housing loan repayments at $1733 a month. Free Suburb Profile report for Campbelltown NSW (2560) Late 2019/2020 Perth market should start rising again.
My in-laws purchased their first property at 50 and the bank would only do a 20 year mortgage, and this was 2 years ago with them having a hefty deposit, so I don't think refinancing is an option.
Technically if the risk for the bank is low, 30 yrs loan term for investment is actually achievable. However, in their circumstances it is hard to say. Good thing is mum and dad is still working, if they can rent a small studio somewhere cheap and rent out the entire house they could actually refinance under investment loan on a 30 yr loan term p&i, provided that the lvr is low. There is no age limit on taking out a loan as long as the applicant can show they have the ability to repay the loan at a worse case scenario.
