Structure for financing next deal

Hi everyone,

My wife and I are would like to get some thoughts on our current scenario on how we could potentially overcome serviceability issues that we are preempting (we will be arranging time with a Broker very soon, so will then find out exactly where we stand).

Summary of our situation as it stands today:

All properties are in individual names, no X deals or anything like that.

Wife
Property value: 1.85m
Loans: 1.1m
Cash: 1.25m (currently offsetting loans above)

Husband
Property value: 2.4m
Loans: 1.7m
Cash: 0.36m (currently offsetting loans above)

Super
probably ~$250k (combined)

We are currently looking at another IP, which is just shy of $1m. We think this is a great opportunity for a number of reasons. This property is also + geared by about 10-15k p.a net.

Our cash flow is quite healthy (both positively geared overall) however the bank obviously views this (very!) differently due to the cash only sitting in an offset. As a result, from the last time I had my position reviewed I think I can probably only borrow another $0.1m or so, I am assuming my wife will be able to borrow few hundred K more?

I am not sure if there is enough information provided but it would be great to get some thoughts on how we could potentially structure a new deal given our situation above.

Ideally the purchase will use as little of our own cash as possible.

Thank you all in advance!

 

You could easily borrow another $1.25mil

 

Ok interesting

I don't think I can, but my wife should be able to?

Definitely need to chat to a Broker but we thought due to all the recent changes it was probably unlikely

 

Hi D&J, that is a very good financial position there.

in regard to borrowing, I assume you are thinking of borrowing by yourself or wife (by herself), without knowing your full details, difficult to say how much you could borrow.

have you thought about purchasing the next IP with your wife ( both names are on the loan for servicing).

and also check out other more generous lenders, such as Pepper, or Liberty.

and more importantly, what is your plan after next purchase? buy more or ..

 

No, you can, she can't.

 

Thanks Eric!

Yeah, we're thinking at this stage in her name by herself. Won't using my name hurt my servicing since future assessments will assume I am responsible for the full amount?

In saying that, I think after this our focus will most likely shift to reducing debt rather than acquiring more.

 

Thanks Terry. Why do you say that? My recent purchase was for ~500k and I was barely able to scrape through with that, and that was before the HEM and other policy changes.

 

Yeah I think the best bet is to probably chat to a Broker asap and then potentially come back here with more information to discuss further if need be!

 

maybe get in touch with one of the brokers on the forum to have a detailed assessment for you, and check out a few possible options. and you are correct re the debt, lenders do look at your existing debts ( not the balance) for servicing. for your case, finding the deposit is not the issue, finding the right lender is the issue, it seems.

 

THink about it.

Your wife has $1.25mil cash. You need a loan...

 

Always a pleasure seeing you in action Terry