[Chris BParticipant@cpbolerJoin Date: 2014Post Count: 2]

August 27, 2014 - 4:50 pm

Hi Sald,
Is your current mortgage $295k or $29.5k? I assumed $295k and that $95k is your gross income, not the full time income reduced pro-rata based on your hours worked.

If my assumptions are correct, you can comfortably afford to borrow additional funds, although many lenders don’t like advancing money for no specific purpose. Some lenders will be ok with this up to 80% of the value of your home, i.e. $320k but not the full $50k you wanted.

If you were planning to buy an investment property (e.g. for $150k), they would be more willing to lend you the money, as they would have security over both properties (worth $550k) and you would have an additional income stream.

You definitely should be paying less interest than 5.18%. Depending on the loan features you want (and lender you are happy to use), you could easily be paying less than 4.90%.

Cheers,
Chris

[Chris BParticipant@cpbolerJoin Date: 2014Post Count: 2]

August 27, 2014 - 2:40 pm

Hi Jaryd,

You don’t need a 20% deposit but the more you have, the better.
The problem with this is that the sooner you get into the market, the sooner you can start building equity.
For example, if you had bought 12 months ago for $300k, the way the market has improved, it is quite possible your property would now be worth around $330k. Of course there are no guarantees of this happening in the next 12 months and it’s no good if you are financially stretched and can’t afford the repayments.

The loan amount is based on the cost of the property.
e.g. if the property costs $300k, 95% is $285k.
In addition to the sale price, you will need to have money for stamp duty (which will depend on state the property is in & whether you are going to live in the property) and for conveyancing, lending and settlement costs. You will also need to pay mortgage insurance but depending on the lender, this may be added to the loan amount.

I think your first step should be to speak to a mortgage broker or bank to find out how much they will lend you. Then you will be able to calculate what you can afford to buy (or how much money you need to save to reach your goal).

There are other options that can reduce the deposit amount you need but this will depend on your circumstances.

Do you know what area you want to buy? Would you live in the property to begin with?

btw, what does an income accelerator do?

It sounds like you’re on the right track, so keep asking questions and get good advice.

Cheers,
Chris

• This reply was modified 9 years, 8 months ago by  Chris B.