Hi All, just introducing myself, a friend put me on to this site. I was lucky enough to buy 6 years ago and take advantage of the Government rebate on new homes which covered our LMI as we didn't have a deposit. I was always of the view "Why buy a house when I can rent for so much less". Well I have to say buying was quite simply the best decision I made, our growth is around 70% and I am blown away by this. Now it is time for me to start thinking about investing, I am 40 years old now and there is no way i am planning on working for another 30 years . I look forward to chatting with you all in the near future.
Hey Dan, So, you bought a PPOR 6 years ago? Do you have an idea of where you're looking and your budget yet, or still reasearching?
Yeah its our PPOR. I am still not sure of where to invest as there are different options for different reasons (Rebuilding of major city, Potential retirement, bang for buck etc). The budget is where I am stuck, The bank have offered me way less than i thought I would get. I have about 300K equity in my PPOR and I am currently paying $1,200 a month MORE than the repayments are supposed to be yet they said they would give me a max of $360K AND that I need to have a 20% deposit. Now this completely confused me, i thought my equity was the deposit?? I also don't understand how I can only get 360K when that doesn't seem to take into account the equity of the IP or the rental return. I am aware that mortgages are all different and banks are all different though so this is why i am here primarily, to learn from you guys about loan structures and how to maximise serviceable debt for wealth creation. I am considering talking to a broker but again thought I would hang out here for a while first and try and get some information on the best way to handle all this.
Hey Dan, This place (and SS) will be a great place to learn about finance. Simplifying to basics, you'll need two sides to borrow: 1. Equity - which you've got in spades. 2. Borrowing power - this is based on the banks assessment of your income and expenses. To release your equity you'll need to have the borrowing power to service that debt. So you'll need to demonstrate to the bank you can afford to repay any equity your trying to release. Then to purchase an investment property, most banks will take into account 80% of the proposed rental income that the new investment will bring in. Therefore things like rental yield on your investments will play a large role in your overall borrowing capacity. I'm sure a lot of this will be fleshed out over the finance threads over the next few months/years - so there'll be plenty of relevant info for you. Cheers, Redom
Hey Dan, Welcome on board and it's great to see you here. Looking forward to doing the property journey with you too.
You're in the right place Dan. Heaps of great input from experiences investors and some excellent brokers on here. Redom covered it. You should drop him a line, he's a GUN broker. You'll be in excellent hands.
