Granny Flat Finance

Discussion in 'Granny Flats' started by Hillbilly, 27th Jun, 2015.

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  1. Hillbilly

    Hillbilly Member

    27th Jun, 2015
    We live on Sydney's Northern Beaches and would like to put in a granny flat at our PPOR. We calculate the tenant will generate more than enough income to service a loan to build the flat

    120,000k @ 4.5% = $5,400pa IO repayments
    Rent @ $400pw = $20,800pa
    Even taking into account having flat vacant for a couple of weeks, plenty there to cover costs

    Our current financial situation is
    PPOR $1.4m LVR 50%
    IP 1 $580k LVR 65 %
    IP 2 $600k LVR 85%
    IP 3 $400k owned outright

    However, husband was made redundant last year and still unemployed. I was made redundant this year but after 5 months have found another permanent full time job. Investment properties are paying for themselves and we can still afford mortgage repayments on PPOR on one wage although much tighter.

    If we go to the banks for finance we won't have serviceability on paper although I know the granny flat would pay for itself. Hubby is in his 60s so won't probably ever work again. I am in 50s so still have 10 years plus to work.

    Any ideas about how we could finance a granny flat?
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    14th Jun, 2015
    Gold Coast

    Even with the lending changes forced by gov there may stil be some options for high servicing lenders. You certainly have the equity

    Age may be a draw back but there may be an obvious exit strategy that a lender is ok with at a lo wish lvr.

    If nothing else with 700 k non ded debt I'd be talking to someone to see how you can recycle that without selling stock down