how much can I borrow ? I owe 550K but the property is worth 700K
Hi Hwd007
What LVR are you looking at?
If you were to go to 80% that would mean only $10k more but if you wanted to go to 90%LVR that would give you an extra $80k, but then you have added costs including mortgage insurance.
Hope this helps!
[
]I agree with Rstar.
You haven’t indicated any income, so it is a bit hard to estimate.
Generally you can borrow up to 80% LVR with not too many hassles. However 700,000 x 80% = $560,000. You already owe $550,000 so that is just $10,000. If you can service it, you could go to 90% = $80,000 extra.
Using this as 20% deposits, you could get roughly $320,000.
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terry and RSTARR
My bank says loan servicing is not the problem. I’m on 59K salary
So I can only borrow $80K ? or that’s my equity ? and I can borrow 4 times $80K = $320K
OK So if I plug in more optimistic figures I get this.
Value 750K owe 550K Thus 750K *.80 = 600K
600K – 550K leaves LVR at 50K so 90% loan would be 400K ? that I could borrow ?
cheers
Hwd007
Ok @ 80% you can borrow $10,000. You can use this to pay for 20% plus costs. Therefore, purchase $40,000 of property (or $42,000 including costs).
@85% you can borrow $45,000. You can use this to pay for 20% plus costs. Therefore, purchase $180,000 of property (or $189,000 including costs). (financing new purchase at 85% as well)
@90% you can borrow $80,000. You can use this to pay for 20% plus costs. Therefore, purchase $533,000 of property (or $560,000 including costs). (financing new purchase at 90% as well)
I hope that helps.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auHwd007,
please also keep in mind, lending is not all about LVR but also about serviceability.
Experience shows that while you may be at the end of your serviceability with one bank another bank may stil give you a loan.Yours sincerely
Rolf Schaefer
RJA Financial Services Pty Ltd
Accredited Mortgage Broker
Tel: 03 9753 9044
Fax: 03 9753 9055
Mobile: 0422 907 022
E-mail: [email protected]Thanks Guys
The Gospel according to seminars and books I have read, is that
banks look at three things – credit history, equity, and income/liabilities.
Banks calculate that you can afford 30 percent of your income on repayments. The LVR goes down (in their favour) in steps as you borrow more (like over 500K and over 1 million.).
If you are borrowing to purchase a cashflow positive investment that works after costs on an 80 percent vacancy rate, they don’t look at your income.cheers-
Minithat makes some sense, but how do you prove that the proposed property is cash positive ? rent ?
The banks must also look at the assets true market value
Hey HWD….what is true market value ?
Enjoy
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Well whatever value the banks decides I guess, as they are the ones giving the nod.
Perhaps I could have used more appropriate words, but the bottom line is that even with adeqtate equity, serviceability and other issues, obviously the banks also consider the estimated value of the property in determining the eligability of the loan request.
This is how my bank lender worked it out;
How much I can borrow as at 1 August 2003
Assuming Estimated Bank Market Values;
PPOR $250K
IP 1 $280K
IP 2 $240K
Total Assets $770K
80% Asset Value $616K
Loan Debt $554K
Equity $62K representing your 20% holding of the loan.
Borrowing Capacity = 62K*5 = $310K
Thus effectively about $300K plus Stamp Duty and legal and other Acquisition costs.
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