Hi all, Just after some advice on a PPOR. I’ve laid out a couple of scenarios below. Scenario 1. Purchase price 1.1m – all cash gone towards 10% deposit + stamp duty + LMI + fees Serviceability – will be under 33% of take home income on IO loan + offset the rest of take home pay (after bills) Location – Ascot Vale, Moonee Pods, Essendon Pros – Large PPOR asset base, premium suburbs, if prices continue to boom tax free CG Cons – if prices stagnate no funds to invest further. If interest rates go up could get dicey Scenario 2. Purchase price 0.8m – 10% deposit + stamp duty + LMI + fees Serviceability – will be under 22% of take home income on IO loan + offset the rest of take home pay (after bills) + money in the offset from lower purchase price. Location – Pascoe Vale (that’s really all I’ve been looking at in that price range) Maybe West Footscray? Pros – money in the offset from lower purchase price. Can invest further or renovate / add value. Less fear of rate increase Cons – less tax free CG, ego hit due to lesser suburb I feel like 2 is the safe bet, but I also would like to just buy a nice PPOR and forget about investing for a while and enjoy more work/life balance in a nice house/suburb. Although investing really doesn’t take much out of me as I actually like it. Thoughts?
What's your actual servicing like? You may find you can't actually borrow as much as you think. The banks don't work on percentages, so it would be worth finding out your borrowing capacity before you get too far ahead.
Approved for 1.3m but that’s scenario 3, I’m not comfortable with borrowing that much, also won’t have enough cash for 10% + stamps etc.
Don't forget to factor in repairs you didn't plan on or other "issues".... Going for broke on a PPOR could be quite stressful if there is something waiting for you to fix.
Scenario 4 - Rent in Location – Ascot Vale, Moonee Pods, Essendon and invest somewhere else without getting PPOR emotions muddled with your 'investment' considerations.
with 1.1m, you will struggle to find a nice PPOR in Ascot Vale, Moonee Pods, Essendon if you are searching for house.
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