Strategies to buying a home

Discussion in 'Loans & Mortgage Brokers' started by joleen, 17th Sep, 2021.

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  1. joleen

    joleen Member

    Joined:
    1st Feb, 2016
    Posts:
    6
    Location:
    Sydney
    Hi All,
    I like to understand if it's possible for me to buy a 1.3-1.8 house in Sydney (eg. Castle hill). I have 3 PPOR, all units, and am looking to sell when the market improves to reduce debt if i'm able to get a new home. I'm hoping to find a forever home (eg. 3 BR house/townhouse/duplex) that's accessible to the city so we can still head into the Sydney CBD down the track)

    I'm looking to either on my own or with my husband. We are both already leveraged and I'm looking to selling PPOR 1 and PPOR 2 down the track when the market improves. They are all units in the inner Sydney city so i think the market isnt in high demand at the moment until borders open etc.

    I also understand from my workplace that I may be getting a promotion soon so there may be a small increase in my salary in the next month.

    My current Situation:
    Income: 145k (inc super)
    Cash: 360k

    Loan Balance vs Current Value vs Rent
    PPOR 1: 427K, 630K, 550 p/w
    PPOR 2: 463K, 650k, 530 p/w
    PPOR 3: 797K, 1.4-1.6m, 850 p/w

    My husband:
    Income: 150k (inc super)
    Dual Key PPOR/OO: 735k Loan (1.1m market), 450 pw rent (we live in the other dual key but if we rent our side it'll be around 600 pw)

    I am thinking of borrowing on my own capacity if that's possible but if it improves our borrowing capacity we could borrow together. We are thinking of moving back to my parent's place for the short/medium term due to covid in the next month. I may also be able to get some help from my parents on the remaining deposit in the the short term until i'm able to sell the PPORs. The purchase could also be treated as an IP initiatially if it helps with the borrowing.

    Ques:
    -Approx how much could i borrow? or what can i buy?
    -Do you have any recommendations on how I could structure this?
    -Should i wait to buy in 2024-2025 instead? I'm just worried prices will climb up again and we are completely priced out.

    Thanks for your feedback!
     
  2. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    10,260
    Location:
    Australia
    Talk to a good mortgage broker.

    and its very confusing to refer to all of your properties as ppor. That means principal place of residence, and you can only designate one as ppor at a time. This has implications for capital gains tax if you sell.
     
  3. beachgurl

    beachgurl Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,318
    Location:
    Sydney
    Having multiple properties means that the difference in your borrowing capacity can be hundreds of thousands between one lender and another. If it is more important to keep properties til you are ready to sell rather than getting the best interest rate, go to a broker for a loan with the traditionally-known non-conforming lenders if u are unable to service a loan with the well known banks.
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
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    Location:
    Australia wide
    how so you have 3?
     
  5. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,599
    Location:
    Gold Coast (Australia Wide)
    there is a bunch of soft and hard data needed to provide any form of useful advice

    Im assuming youd have a broker that set the original loans up for you ? Contact them and see what they would think

    Inner city unit stock can be a challenge to pull equity from, and with many lenders use the max rent as well

    ta
    rolf
     
  6. Tony Xia

    Tony Xia Structured Loan Advisor Business Member

    Joined:
    23rd Aug, 2015
    Posts:
    1,546
    Location:
    Bella Vista
    You should talk to a broker that can do multiple calculations for you with different lenders to see who is able to provide you with the max borrowing you need.

    If you current lender (assuming mainstream) cannot lend you anymore then you would probably need to go yova smaller lender.

    Once you've paid down your debts then move back to a mainstream.
     
  7. Colin Rice

    Colin Rice Mortgage Broker Business Member

    Joined:
    9th Jul, 2015
    Posts:
    3,183
    Location:
    Perth
    You will need to contact a good broker (the above people will fit that criteria) and complete a fact finder so they can run the numbers for you and determine a strategy as well as max borrowing capacity.

    see my comment above :)