Trying to borrow, mixed opinions from brokers

Morning all,

Looking for a little advice from the experts here. Recently moved out from PPOR in Sydney and turned it into an IP. I bought the PPOR in 2015 with my wife but she is currently not working and won't be for some time. This is my current situation:

Annual income: 85,000 p.a.
Rental income: 28,000 p.a.
PPOR: 585,000 balance. Currently IO @ 3.84%
House is currently worth about 760 imo.

I did pay LMI when purchasing the house and the loan is fixed till Dec 2018.

I've sppoken to 3-4 different brokers and I'm getting very mixed responses (if any response). Some are saying I have no room to move whatsoever and couldn't even refinance if I wanted to and others saying that I can probably borrow up to 35k (yes 35k) but weren't sure. One broker told me I could borrow 280k but I just feel this is odd and just wanted another opinion. I just really want to know what I can do now in terms of real estate or if I should just give up find other means of investment.

I've tried to give as much information as needed but didn't want to overload everyone so excuse me if I've missed anything.

 

You're not going to get any reasonable information here by providing 4/100 variables needed to look at your situation. The only way you're going to get the right information is from working directly with a broker - which it sounds like you've not had much luck with.

The outlier result from the other broker may be accurate, it just depends if the other 3x brokers weren't aware of all of the options available. Not all brokers are created equal.

 

Yeah, that's what I'm hoping for to be honest, just a bit of direction as to who I can speak to.

Haven't had much luck at all with brokers. I can't even get them to get back to me at this point.

 

In reality you're almost at 80% LVR - I can take a punt to say it's very unlikely that you would have sufficient capacity with any lender to be able to release equity above 80%, if it at all.

So you're going to be reliant on stumping up cash for a deposit - which to be on the highest servicing lenders will need a 20% + costs deposit. Only then it *might* be possible pending the servicing with those lenders whether you may qualify.

 

Probably because they know you are a shopper, the good busy ones wouldn't waste their time. Harsh but reality

 

The good busy ones would let him know they can't help, rather than leaving him hanging.

 

Pretty sure they gave him a response that's why he is here

 

Yep - some didn't bother getting back to him at all he said. But you're absolutely right - people who shop are lots of work with very often no return, so many won't bother.

 

Thanks mate, that sounds very similar to what the broker that actually spent some time with me said.

And yes, most brokers didn't even respond. Seemed to not be interested in me once I told them I was looking to purchase an investment property.

 

So how many did you speak if most didn't respond??? Some said you have no room to move, one said $35k, one told you $280k ... if most didn't respond I can imagine how many you spoke to, because thats already 3 that responded. They see you coming a mile away mate that's why you're not getting responses. I wouldn't respond either.

 

Honestly you sound like you might already be at or close to your borrowing limit. I'd consider paying down your debt for a while or investing in other areas. There's been a lot of tightening going on between new regulations and general risk reduction. You've probably borrowed about as much as your current earnings will allow, you're on IO (banks need to reduce their IOs to below 30% of their books and some are sitting on 50%) so you also have to consider that you'll likely be paying P&I sometime in the near future too as (according to my understanding) you're unlikely to see your IO term extended, which again reduces your capacity. They might be taking this into account.

 

Every dollar of debt is being assessed at 7.25% PI, if you punch that into a calculator you'll find out just how much that figure will be out of your pay packet a week were things to ever get that tough.

I'm on a similar wage $85k PAYG, $15k rent, $250k debt and my maximum borrowing capacity is about $630k, though the difference between us is you're currently supporting your wife, do you have any kids?

 

Sell it. Buy 2 or 3 cheaper properties and add some value by reno