Hi,
I’m new to this forum, i’m also new at the whole real estate thing. I have a question which i’d like some advice on and i thought you guys would be able to help on [
]My partner and i are looking to buy our first home which we will hopefully live in for only a week or 2 before renting it out till we get married and move into it in a couple of years time. From what i understand, we would be eligible for the FHBG so long as we’ve lived in it for any amount of time within the 12months. However, we’re really unsure about how to go about renting it out since we’re applying for the home loan thats based on the fact that the house will be our principle place of residency (i know i’ve probably confused everyone now). As the bank told us that there is a big difference between applying for the home loan for a house in comparison to applying for a home loan for an investment property (apart from the fact that you can get the FHBG with one but not the other).
Does anyone know whether we’d be able to do this (ie. apply for a home loan with the assumption that we’d be living in it and not renting it out but then only end up staying in it for a couple of weeks before renting it out?)
Kim
Check around on this answer but my understanding is that you’ll need to inform the bank of the change if you want to keep it legitimate as they have different policies for owner occupied Vs investment properties (for example the percentage of the house price they will lend – the LVR – is often significantly more for owner occupied). Failing to notify them may give them the right to “call the loan”, which means to give you an extremely short period of time (say 30 days) to pay off/refinance the loan. As I said before though, check this for yourself (say with a your bank/mortgage broker/solicitor)
Quasimodo [^]
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It seems to me that action has a most magic way of answering all the questions our fearful mind tries to throw before us…
__________________________________________________Hi Kimtruong81
There is not much difference between owner occupy and investment loan products, especially from a banks viewpoint. In fact, I’ve heard of some borrowers go the other way – say they are purchasing for investment purposes and then live in the property (so they can use the estimated rental income to qualify for the loan).
If you’re concerned, you can still apply for an investment loan, live in the property for one week, qualify for the FHOG, and then rent it out. The type of loan taken should not affect your eligibility for the FHOG. Furthermore (as far as I’m aware) there is no minimum period stipulated to to “live” in the property to qualify for FHOG.
Anyway, if in doubt, check your loan terms and conditions. You may not have an obligation to tell the bank if you change uses of the property (i.e. from investment to residential). Most don’t require this.
I hope this helps.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auHi, thanks for the advice guys………….the way you understand it is that we could still qualify for the FHBG even if we take the loan out as an investment property??? Well then the bank we went to is either not too knowledegable on the the topic or is telling porkies! He told us that if took the loan out as an investment property, we would not be able to qualify for the FHOG.
I think i’ll have to go back there and ask some more questions about this.
Thanks for everyones advice on this, very much appreciated.
Kim
Don’t think the bank is trying to mislead you. It is how you phrase your question. I don’t think you can buy an investment property & then apply for the FHOG. However, if you had bought a FHOG property, changed your mind & decided to rent it out, that’s probably ok. However, suggest you check it out very carefully as there may be legal consequences.
The other thing to think about Kim is talking to a broker and explaining what you want to do and seeing what they advise as to products. That way you get a wide range of possibilities in products. I wish I had known of brokers all those years ago when I had bought my first house….. Lesson learnt. Stu always offers help on the site (amongst many other great people) he may be able to tell you more.
I think talking to a broker rather than a bank mean you can be more open with them and your true aims. Also if you talk to the right person they are active investors themselves so are aware of what you want from experience.
Hope this helps..
Enjoy
AD [:0)]
(Andrew)“”Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world.”
Albert EinsteinTis a bit late but relevant.
Banks want your business, everyone wants your business.
Tell them you want a IP loan at House loan rates, They will play ball I worked for CBA for 8 years I know the ropes hit them up for the cheaper rates, if they wont play ball tell them your going to see Aussie Home Loans, they HATE that name and will give you lower rates to keep your business if you ask and are a high value client.
At the end of the day a loan is a loan is a loan no matter what it’s for.
I think everyone should by pass the banks all together they suck so bad.
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