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Discussion in 'Property Finance' started by Sannie, 6th Aug, 2016.

  1. Sannie

    Sannie Member

    Joined:
    2nd Jul, 2015
    Posts:
    14
    Location:
    Adelaide
    Hi All. Could someone please advice me on my situation.

    I have one IP in Adelaide purchased as PPOR in 2013 for $225k and turned it into an IP in 2016. RP data values it at $253k. I have a loan of $213k on it with $13.5k in redraw facility (so $199.5k loan!).

    I also have another 7k cash and my wife has another $12k cash in our savings. Mostly all recently saved up in our last six months from our new job. And we would like to hold some cash at the moment considering me and my wife are expecting our fist baby soon in another couple of months.

    Now I have an obligation to spend $10k for a personal family Occassion I HAVE NO CHOOCE BUT TO SPEND!!

    Asking all your advise what would you do if you were in my shoes.

    Use the money in redraw facility?
    Or use the money in the savings?
    Or can any possible way refinance from IP I have and take more loan out? ( haven't spoken to my broker yet) so I have control over the money I have in redraw and savings until my wife gets back to work force in six months from now.

    Any and all ideas are appreciated.

    Thanks in advance.

    P.S- even if I run out of all money I mentioned above- I have a back up plan in the form of my dad -lucky to have a very supporting father!
     
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  2. Marg4000

    Marg4000 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    898
    Location:
    Qld
    Probably best not to touch the loan on your IP for personal reasons.

    Probably best to use your cash. Still leaves you $9K in savings.
    Marg
     
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  3. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    898
    Location:
    Melbourne
    If you use the money in the redraw, be prepared for higher accounting costs.....

    The Y-man
     
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  4. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,544
    Location:
    Sydney or NSW or Australia
    Why didn't you set up an offset account rather than a redraw?

    Sounds like your only option not to contaminate your loan is to use cash.
     
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  5. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,159
    Location:
    Gold Coast
    Cash

    ta
    rolf
     
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  6. Sannie

    Sannie Member

    Joined:
    2nd Jul, 2015
    Posts:
    14
    Location:
    Adelaide
    It was a No Fees variable loan. I was suffering from serious low wages ( worst than now) all these years since I arrived in Australia and was determined to buy an own home and bought and set it up with no much/ any knowledge at all at that time.

    Thank you all for the replies.

    While I am here can I also please get your suggestions what will you do if you were to buy an investment property in Adelaide again in another 6months to 1 year from now and We still hold the same amount mentioned above plus another $10k in savings.
    My annual income is $42k gross /ex super
    My wife's income is approx $ 52 gross /ex Super
    ip rented at $250/ wk
    We are renting in NSW

    Eagerly looking forward for all your valuable replies.
     
  7. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,957
    Location:
    Sydney
    Borrow to invest
    Use cash for personal expenses
     
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  8. Xenia

    Xenia Adelaide Property Manager Business Member

    Joined:
    21st Jun, 2015
    Posts:
    2,342
    Location:
    4/136 The Parade Norwood, South Australia
    Hi Sannie
    I would suggest speaking with @monalisa and @miss Ali from this forum.

    They have structured a very large and constantly growing property portfolio and can give you some ideas on how to get the finance correct from the start.
     
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  9. Westminster

    Westminster Tigress at Tiger Developments Business Member

    Joined:
    13th Jun, 2015
    Posts:
    2,944
    Location:
    Perth
    I'd talk to a mortgage broker now about possibly getting a better loan product on the current IP now before babies and dependants come into the picture
    They can also give you some advice on how to structure the 1 you have and a future purchase so that together the 2 products can be used in the best way possible. Don't tinker with one thing now then find out when you want to buy #2 that #1 bank product is going to hold you back.
    Forward thinking is great and you are right to be thinking about #2 now and how your income and situation will affect those choices
    Sorry to hear that $10k is going to disappear but it sounds like it's a family thing and everyone is pitching in from the family so I hope it doesn't set you back too much.
     
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  10. York

    York Finance Broker Business Member

    Joined:
    24th Jun, 2015
    Posts:
    1,620
    Location:
    Sydney
    @Westminster makes some great points regarding getting the structure right from the start. This is paramount if your objective is to continue to grow a portfolio. @Corey Batt is a broker from Adelaide and is also a property investor with extensive experience in finance and investing. Why not give him a call and see what options are available to you including a possible refinance to the most suitable lender for your requirements. Also he can help map out you next purchase/s in the future if that is your goal.
     
  11. albanga

    albanga Well-Known Member

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    19th Jun, 2015
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    1,105
    Location:
    Melbourne
    Unfortunately this won't be possible right now. A broker will need to ask if they are expecting any financial changes and they will need to answer truthfully which is YES. This will then severely impact their options.

    Definitely use the cash, you still have a decent buffer and ofcourse the dad factor.
     
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  12. Westminster

    Westminster Tigress at Tiger Developments Business Member

    Joined:
    13th Jun, 2015
    Posts:
    2,944
    Location:
    Perth
    Good point @albanga - I just meant that although they need to disclose (depending on when the baby is due) that it's still generally easiest to do it now than later. They may still be able to get a better product than they are currently in.
     
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  13. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,167
    Location:
    Adelaide, SA
    Definitely use the cash. In terms of product I'm going to take a guess that you're with CBA and the initial purchase was almost 95%, switching lenders wouldn't likely be productive on those numbers as you're still over 80%, and if you did move you'd forfeit any previous LMI paid.

    It may be worth seeing if you can have the loan switched to the SVR MAV package with offset account if a deep enough discount can be given, but with the <250k loan with no new lending it may not come up that great.
     
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