Advice needed! First investment loan

Discussion in 'Loans & Mortgage Brokers' started by YeLe, 13th Feb, 2020.

Join Australia's most dynamic and respected property investment community
  1. YeLe

    YeLe New Member

    Joined:
    11th Feb, 2020
    Posts:
    1
    Location:
    Melbourne
    Hi Members,

    I am starting my investment journal and I am all new to this, so my question might sound a bit silly.

    I am asking a mortgage broker to find out about my borrowing power. They have given me some advice but I never had a mortgage loan before so I am not sure if I should trust or even follow their advice.

    They said if I apply for an Owner Occupier Loan, I will be able to borrow more compared to Investment Loan, and cheaper rate, and I can apply for stamp duty exempt as my budget is $550k max (I am based in VIC). After that I can live in there for 6mths and later rent it out as what I originally planned to do with this investment property, but I don't need to notify the bank that this property is now using as an investment, no longer PPR anymore.

    What is your thoughts?
    As I said I had no previous experience in investment property so I don't know what is within the 'should' and 'should not'

    Thank you so much
     
  2. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    3,274
    Location:
    Australia
    How do you know anything you read here will be right or wrong though?

    some self education first. Read lots.

    there are always multiple ways to do things. In your example, what if you just dont want to move into it at all?
     
    Last edited: 13th Feb, 2020
    Lindsay_W likes this.
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    5,731
    Location:
    Gold Coast
    Not something I would suggest to a borrower since its a breach of their loan agreement in almost all cases.

    Almost all contracts I have ever seen demand agreement to notify if converting to IP

    ta
    rolf
     
  4. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    5,185
    Location:
    Melbourne, Nationwide
    One thing you've gotten wrong. To be eligible for the stamp duty reduction you need to move into the property within 12 months of the settlement. You need to live in the property for 12 months, not 6.
     
  5. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    915
    Location:
    QLD
    What's your investment strategy? Do you NEED the additional borrowing capacity an Owner Occupied loan will give you?