Cash out best approach

Hi all,

need some advice on a refinance

currently live in ppor and rent out two rooms at around $280 per week combined ($14,560 per annum)

this has been the case for over 1 year now

I have an annual income of around $50k before tax. This is a part time permanent job

Mortgage with ANZ with balance $304,000 with a recent valuation of $428,000

looking at borrowing 95% of this value (happy to pay lmi)

What approach would you take with the above scenario to achieve cash out of 100k (before lmi capitalisation)?

which banks will accept rental income from ppor?

How can I increase servicing?
Any help will be great

thanks!

 

Hi Rolf

mainly debt consolidation. I’ll be borrowing funds from family to pay off around $40k debt before the application approval and then pay back that 40k after approval. The remainder will go towards Reno.

I’m yet to lodge tax return, have not declared this income in past tax return. Will do so this year

All rent is banked Straight into mortgage account from tenant

 

If you're going to ask for cash out to 95%, you'll probably be disappointed with the outcome. It's possible to about 90% (including the LMI), beyond that it's going to be a real stretch. In fact a lot of lenders are very reluctant to go above 80% (and in a few cases 70% LVR for cash out).


Your existing income may be enough to service the debt consolidation, but the full $100k you're after is going to be a stretch. The only ways to improve serviceability are to reduce debt or to increase income.

In this case the debt consolidation component is likely achievable, but ask yourself if the renovations are really necessary at this point.

 

I have done 3 cash out loans in the last 6 months.

80% LVR, unlimited cashouts. (Serviceability criteria should be met).