Dilemma

Hi All,

I have a bit of a dilemma. I am saving for my first ip which is a bit hard on one wage while my wife is on maternity leave. We have $60k in an offset account from the equity in our ppor which I was thinking of using to renovate our kitchen.

My wife keeps asking me if I can do the new kitchen which will cost approx 20k as it is a bit of a structural Reno as well due to me removing about 3 walls to open the whole area up.

Would it be wise for me to use $20k out of the $60k to do the Reno while I am still saving for the rest of the deposit and then get the house reevaluated to try and get more of an equity release or should I not touch the $60k and keep saving the rest of the deposit and do the Reno later once I have saved more money again?

My wife goes back to work in February.

Brian.

 

Do you think spending $20k on the kitchen will increase the available equity to draw down on?

 

I think I will atleast get the $20k spent on the Reno back and keeps the wife happy

 

You should really be saving a deposit, but building equity from which you can borrow for a deposit. Pay down the home loan and set up a new split to borrow. Using part of the savings to do the kitchen may make an increase in value which you can tap into.

 

So is it better to pay the home loan down to increase equity rather than save a cash deposit?

 

You can do the kitchen for less than 20k sharpen the pencil a bit

 

It's for kitchen, tile the floors of the house, paint and sparky. Thought it was just easier to write kitchen.

 

Sometimes you just have to ask the question,what's 20k on a kitchen if your wife is happy then i'm sure you will be,happy wife happy life..

 

You can do it!
Shop around. Ikea, grays online, eBay, few cashies

 

That's what I was thinking. Although she is generally happy but I just think she deserves a new kitchen if that's what she wants

 

Yes true I probably could get it done cheaper. The main carcass of the kitchen will be staying and just put new panels and doors on in the colour she decides and I will just be doing a few mi or changes to the kitchen layout and we are adding in an L shaped island bench. My mate is a stone mason so he can get the benchtops for next to nothing.

 

For a carpenter - almost builder - you can do it a lot cheaper.

 

Yea I know I was just thinking worst case. And depends how crazy she wants to go with appliances, lighting type of benchtops etc. she seen a feature ceiling I done in a house the other day and now she wants me to do it in ours.

 

You have a baby?

You do what she wants

Make sure you understand Terry's post. Your deposit for your IP drawn down from equity in your PPOR and sitting in an offset is a concern

 

Didn't you have a thread goingfor the kitchen? You'll be able to do it for 10k by the sounds. Your time will save heaps

 

Can you share who you've got to do that? I've asked and meet a few and all only interested in whole new kitchen. ...

 

is you home in Sydney ?

When did you last refinance ?

Do you have any serviceability issues ?

What was the LVR at last loan setup ?

If you said, In Syd, not for a few years, no prob with bigger loans, LVR was at 80, then putting 20 in will probably get you a lot more back out.

 

Yes. Never use cash to invest. Use equity first with a loan split for better tax strategy on the IP.

 

It comes down to your own situation.
There's no way I'd be spending anything on a PPOR kitchen in the position you're currently in.
Delayed gratification still pays off better in the end.

 

Agree 100%.