How long would it take to get a pre approval / pre purchase analysis

apologies, I misread your post, youre wanting to lock down a 3 yr fixed with bankwest from the start. Still, there is a risk your details will change over the next three years and it may be harder to refinance than you assume.

Let us know how you go, investment loans at 90% can be an issue to get approved, and bankwest can be a bit hit and miss.

 

If you want to get equity out, don't do it. BW is terrible for cash out, and you'll have no room to move if they say no.

If you're buying at high LVR and servicing is strong, ANZ would be a better lender - rates are junk, but you need to consider the potential opportunity cost of having to wait an extra 2 years to do what you want to do - a few points rate difference is not worth it if you're serious about moving forward.

 

My assumption was that I would not see enough growth in less then two years to warrant a refinance to release equity. Three years? Yes.. so no need to worry about cash out on this purchase but then I have also seen these particular units jump from $254k to $280k in 14 months so that gives a 5% growth per year right? Following that trend means that my $280 unit could be worth $308k in two years.

If that was true in two years and I refinanced am I doing my mats correctly to say that if I took the initial loan at 10% and the refinance at 10% I would be able to release $25k of the increased equity.

Purchase at $280k @ 90% LTV = loan of $252k
Increase at 5% per year compounded means in two years value is $308k
$308k @ 90% LTV = Loan of $277830
$277830 minus the original loan of $252000 = $25830 released.

Am I doing my sums correctly on this? If so I see the benefit of not taking the Bank West loan.

Another angle on this is that this will be my first intentional IP purchased deliberately as an IP from the start. My other on is my old PPOR so it makes it a little more scary that I get it right, The fixed loan helps that comfort blanket feeling.

I intend to let this run a little while and wait a little longer for the Perth market to calm down then buy something here at around $230k with the intention of adding value through sweat equity . renovations. On this second property I would be intent on refinancing to go again in the shorter time if I got it right.

Would you be happy to work with me to get set up correctly Jamie?

 

Thanks Jess. I'll take a look at what ANZ have to offer. I have just taken a credit card with them for just $1000 to start good credit. I am told that they will offer at 5% to existing credit customers. This could help me purchase that second property locally if that's true.

 

Just looking at the difference of Bank West v ANZ. The difference looks like Bank West at 4.29% v ANZ at 5.71%. That means a monthly cash flow difference of $297 to me at the sharp end. I understand the need for flexibility in the future but at that rate I am not sure I can sustain the loan.

With fixed for three years and knowing where I am I will relax a lot more, utilise the extra cash flow for any issues that come along. This is my first one so some peace of mind would be good. The ol sleep at night factor.

With an assumed low rent to ensure a tenant rather than assuming hitting full market value this means that it will be negatively geared even after depreciation. I do not like that. Doubtful that I have secured the greatest deal on the market either with my lack of experince so that makes the security of the fixed even more appealing.

 

Fixing a poor deal does not sound wise.

ANZ is not 5.71%. And regardless, ANZ was just an example due to their excellent cash out policy @ 90%, but there's a zillion lenders that will be better for you than BW.

 

Thanks Jess. I was only looking at their website offered deals.
Sounds like a broker is the way to with this.

 

Yep for sure. You'll do well with Jamie.

 

I'm in the branch of ANZ as i type this and they have offered 4.7 variable. Why advertise 5.17 if they are going to offer 4.7 in the branch. Crazy. Minefield.

 

It gets better. Lol.