Hi Goal: Purchase a investment property with my partner. Issue: Loan serviceability Financial situation: We work and live in regional Australia. I earning $80,000 and partners salary approximately $55,000. Both of are early 30s, no children at this stage (thinking maybe next year?). Savings: Little low at the moment, trying to build granny flat in one of the properties and saving for a wedding. All in all, $35,000 but remember we have a wedding to pay for and finish off the granny flat. The granny flat is half built currently and I haven't taken any loans for it. Assets: I/P: Minto, NSW (bank last valued it at $640,000?). Rent is $350 p/w, looking to build granny flat (no loans on it as I've used my own cash for the build), loan is $425k on 5%I/O, ending 2019 - NAB. I/P: Leumeah, NSW (bank last valued it at $635,000). Has granny flat. Current rent is $700 p/w with granny flat. Loan is $480k on 5% I/O, ending 2019 - NAB. I/P: Ingleburn, NSW (never got valued but was recently asked to sell it for $520k). Loan is $288k 4.69% I/O, rent is $340 p/w, ending 2020 - Me Bank. I/P: Whalan, NSW (not sure of valuation but assuming $650k?) Has granny flat, $700 p/w rent with granny flat, loan is $475k 4.68% I/O (coming off fixed period in Nov 2017). Partner's assets: Own's 40% of a townhouse in Melbourne with another person. Loan is fixed until 2019. Debts: We don't have any debts (other than mortgages of our own properties), no credit cards etc… We own our cars outright, no hire purchases, no student loans. I am not really breaking-even due to some ongoing repairs and maintenance of the properties - they are old so I fix what is required to keep tenants in the properties. Recently went to a family mortgage broker looking to take some equity ($50k) out of the some properties for health and family reasons, he declined due to banks recently changing their assessing creiteria in assessing investment loans and my serviceability would come into question. My partner and I are wanting to buy a property together under a joint name but the bank are not lending at the moment due to the amount of loan I have and how she is assessed - her 40% share. I am wondering what are our options are from here? Few options I thought off: - Cross cross collateral against one of the properties. - Come Nov 17, refinance with lenders such as Liberty Finance? Any input will be much appreciated. Thanks
Hi there, Crossing won't help your servicing at all and will create a whole new world of risk so don't go there. There are some lenders that will take only your partners share of her loan, so that may be an option for you? Liberty could also be an option and possibly others if the only lenders you've tried are NAB and ME - both of them are pretty tight servicing. If you want the equity I'd find out what your break costs look like as the more generous lenders may not be for much longer. It may be worth breaking if the costs aren't too outrageous, and even if they are, there's opportunity cost to consider. Find out the break cost as a first step and go from there.
