Forum Replies Created
Cheers Richard<br /
:-)” title=”>:-)” class=”bbcode_smiley” />Guys …. No need to argue …..
You are both correct and talking about the same thing.
The concept is designed for budding home buyers who would like to get into the property market. The Adelaide Bank EFM product is one of the most popular …. in this case the property title is placed in your name. The bottom line is that it gets you into the property game! So at the end of the game …. assuming the property value rises in value, you take 60% of the increased equity. Not bad huh! Better than 60% of nothing? Consider it a partnership or JV where you control 60/40… afterall the property game is about controlling property, not really owning it nowadays?
Make sure you do your homework on where you want to buy …. and what the property market is doing in your region of choice. You should make sure you have a detailed plan of action over the next 5-10 years or at least the next full property cycle after which it is likely that the property has doubled in value.
Another such product is O2B or Option2Buy …in this case … they hold the risk and the title until the end of the termed contract. They also charge you a fee and ongoing rent, insurance and savings plan. visit their website to find out more ….
These and other products are not for everyone … but can be used very effectively if used correctly and for the right reasons within your goals.
Good luck with your goals Wezwaz!
I can see that you are very attention to detail Richard, but can sometimes get lost in the concept of simply sharing general info in the forum.Cheers
Congrats on the marriage NewGen!
Glenelg North is a great spot …. I use to live in Adelaide too! But…opted for Sunny Qld now!!!
Yes… it's important to strike a balance on wealth creation and lifestyle. Firstly, you should congratulate yourselves
for what you have achieved so far. You've done a great job!It is possible to get 100% or greater lends … but they usually come at a cost …. either higher rate, fees and charges and/or less flexibility. The higher you go above 80% the more LMI you will pay.
Based on my calculations you are cross-collateralised at about 80% LVR on the two properties. This means that you don't really have all that much equity available in the properties at this stage. Provided it wasn't going to put stress on the parents property and relationships, and provided the parents have suitable serviceable income …. many children do receive assistance from parents holding good equity in their property. Make sure everything is discussed though … the good, the bad, and the ugly …. so there are no surprises on both sides.
If you do some sums on a purchase for PPoR at $600K and assuming you borrow 90%…. that's a $540K loan on your home!
Just looking at interest only for the minute …. that is a repayment of $3600 p.m or about $830p.w not including principle reduction, fees and charges, rates, water, insurance etc etc. So $500 p.w or even $600 p.w is not really bad compared with the cost of a home that is not returning you any tax benefits???Remember, regardless where the borrowings come from …. eg parents property …… you still owe what you owe!!! And you still have to make repayments on all the borrowings.
It sounds like the decision for a new home is very much an emotional one …. Emotional decisions are where we can often make costly mistakes. Try putting yourself in the situation ahead of time if you were to get a $500K or $600K home and what sort of bills would you have plus the mortgage repayments?? Write them all down …. this might help your decision.
If you'd like to talk … I'd be glad to give you my number if you send me an email …. sometimes it can be better to discuss situations rather than type them!
Regards
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