Serviceability when accessing equity, low savings

Hi guys

I purchased a ppor late last year for 480k in an area that has seen a bit of growth in the past 12 months (valued at 550k now) and was wondering how the banks would potentially veiw my current situation

Looking at renting out current ppor (would be neutral geared) and accessing up to 90% lvr (equity loan split) for a 12% deposit + 88% lend from different lender to purchase a new ppor in a different area worth approx 450k

Current salary is 65k and have low savings as I've plowed most of my money into renovations over the last year

I'm in a de-facto relationship with parter who makes approx 40k whilst studying at uni, partner also currently has minimal savings and a help debt (which I have read can effect serviceability quite harshly). Would preferably like to purchase new ppor in my name as to leave partner with some access to first home buyer grants in the future

Wondering how the banks would view my current serviceability after renting out my ppor? Do the banks generally need to see a solid few months or savings when accessing equity? Is my current salary too low to service a 2nd loan? Would the banks be more inclined to lend with my partner on the loan?

Thanks for any replies, this is currently a hypothetical scenario and I plan on seeking out a mortgage broker from this forum once I have officially rented out the current ppor and have some actual figures to work with

Cheers

 

Brokers will run hypothetical scenarios for you. Find a good one.

you are talking about 950k debt on your 65k salary plus 40k for your partner. Thats a lot of lmi, even if you could.

Thats pretty thin. Whats the rush to do this, as opposed to just staying in your ppor and save some more?

 

If you are borrowing deposit and duty there is no need to show savings.

But the existing debt and new debt will need to be able to be serviced on your income and potential rent.

 

Thanks for the reply

No real rush but just looking at options at this stage. Will be relocating for work in a few months and would prefer to buy rather than rent if possible. Partner and I are both on track to increase earnings by a substantial amount over the next 2-3 years so not too worried taking on more debt if current ppor rents cover original loan expenses

 

Thanks Terry

That's good to know

Would you say including my partner on the potential new ppor loan would improve serviceability? She doesn't have any debts other than a uni help debt which she isn't currently paying back yet

 

Yes prob would

 

Thanks for the detailed response Rolf

I'll definitely be reaching out to a mortgage broker before renting a place out in new area

We have the opportunity to move back home while looking for the new ppor (family live around the area) so have some options when it comes to buying vs renting

Ideally new ppor would be turned into a 2nd IP later down the track when my partner and I are both on higher wages/salarys

 

The ATO considers net income for calculating HELP repayments, not gross (though any negative gearing benefit is excluded). "Adjusted taxable income" is the technical term for the calc used, also used for FTB and some other payments.

Gross rental income would brutal!