Help me begin my property investment journey. Brokers advice needed...

Hi forumites

I need some advice. I am a 30 year old female employed in recruitment. I am a full-time CASUAL employee on a fixed term contract that ends at the end of July this year. In all likelihood it will be extended into the foreseeable future. I have been in this role for more than 3 years now with extensions generally taking place every few months.

My gross salary is $1,700 p/w. Net $1,274. I don't get paid holiday leave, sick leave or anything.

I have a P.P.O.R in the Illawarra region. It is probably worth about $550,000 (or at least it will be by the time my boyfriend finishes renovating it - he works on it most weekends). He does not live with me. I am single with no dependents for the purposes of the loan application (I do not have any children).

My mortgage is about $350,000. Interest rate is 3.85% (P&I). It is with St George Bank. From the feedback I have gotten with St George, they wouldn't be willing to lend to me to by an investment property (I didn't apply or anything it was just a generic over the phone call to see what was possible).

I have the following credit card debts:

Westpac: $7,000
St George: $6,400

I plan to pay them out before applying for an I.P though

So obviously St George is not going to play ball and allow me to buy an I.P. Therefore, I will need to refinance with a different lender to make it happen (if it is even possible that is). Which lender would be best suited to my circumstances? Happy to work with a broker that is willing to take the time to understand my goals and structure things well from the get go (I have been reading the forum for a while so understand the importance of structuring your lenders right in the beginning to use the easiest ones first and yada yada).

So yeah. Let me know what is possible guys and what is the best route for me to take? I am happy for brokers to inbox me if they are willing to work with me.

PS: Almost forgot, how much would I be able to borrow and with which lenders? (if any at all given my casual employment with fixed term contract status)

 

I haven't crunched the numbers but you might need to use lenders that are more conducive to casual employment - using a couple of lenders (one for the owner occ and another for the IP may help as well - it could bolster your borrowing capacity for the IP).

Cheers

Jamie

 

Pay off the cards and shut one down
What are their limits? That affects the amount you can borrow re serviceability

 

Agreed. The credit cards hurt serviceability even when you don't owe anything on them. Pay them down and close one or reduce limits on both. Your broker will be able to guide you on the best approach re the credit cards.

 

Jamie is on the money. There's a few lenders who are much fonder of casual contract income so a refi away from St George is probably going to help you move forward.

As for a broker, why not drop Jamie a line or one of the other great brokers here? If you've been reading the forum for a while you'll have had a chance to get to know some of our personalities and who you might like to work with.

 

Allison, get those cards paid off and make sure they are paid off at the end of every month.

Remember that banks are fair weather friends, and when it looks like its going to rain, they want their umbrellas back...

 

I actually think that the St G dude you spoke to didn't include any rental income in your assessment. Best get a second opinion to double check.

 

Hmm... so you think it is possible to stick with St George as my lender for my primary residence whilst still being successful in acquiring more properties? (with other lenders I suppose)

I would much rather this if at all possible as I have already paid L.M.I with St George up until 85% when I initially purchased this property. Therefore I assume I could refinance back to 85% again with no L.M.I payable (or perhaps just a top-up of L.M.I worst case rather than paying it all again with a new lender).

It just seemed that the extracting equity part was difficult with St George (I dunno whether it was because of my income, the fact I am a casual employee or what not). But if you think it's possible do let me know. You guys are the experts.

Thanks for all the advice regarding the credit cards. I'm well aware of it. I just went all out when Masters closed down and spent probably $20k-$30k or something ridiculous I have a spare car I could sell to pay them out when the time comes.

 

Well what's the likelihood of it?

 

Paying off any credit card debt and cutting down to just one card not only help your serviceability but also the interest charged to your credit card debt is likely to far exceed your investment property yield.