Hi I am new to this I was just wondering if buying your first property is the hardest to get…do the banks get better with lending you money as time goes on? or is it always this hard?
buying the first one is the hardest for so many reasons….
am i doing the right thing? Am i going to lose money? what say it all goes wrong? what say I make a mistake? What say people laugh at me? What if, what if, what if, what if you don’t?
Which is worse? are you confident about the numbers? well go and tell the bank, and show them -!
I personally chose a positive cashflow property for my first one, choosing to rent my PPOR a bit longer. Positive cashflow increases your income and will make it easier to get a second one. A Negatively geared property will make it harder to get a second property unless you have heaps more spare income, or time has passed and the property has gone up. I think if you are planning on getting one after the other a mix of positive and negatively geared properties so that the total is always positive is almost mandatory.cheers-
Mini‘from zero to three properties in one year’ – hehe
Another reason the second property is easier is because you can use your equity in the first property to purchase the second one. Sometimes without needing any cash deposit. The third one gets easier again. The more capital gains you are getting the better for this.
Andrew
http://www.rentmaster.co.nzthank you everyone who responded i am very confident with the money side of things i know i can afford it but its hard to convince the banks morgage insurance is the killer i have found they are the hardest to get past i tried to get my 1st investment property a year and a half ago the bank said yes then the morgage insurance fell through i was very dissapointed but i aint going to give up DID YOU HAVE TO GET MORGAGE INSURANCE FOR YOUR HOUSES?At which house do you stop the morgage insurance??Gaining capital growth in the country takes a long time doesnt it??
For my first house (PPOR) I had to get MI. Property was 118k, deposit was roughly 20k & loan was 104k. Something like that anyway.
On buying my second house (1st IP) I didn’t have to pay MI due to equity in my PPOR etc. So as the others have said, its easier to get loans without MI after your 1st property (providing you have some equity in your existing properities).
Kristine,
It’s sound familiar to me when I bought my first one because you don’t have any equity.
I did not pay MI because I used my parent PPOR equity and secured against it. The bank actually lend me 106% to covered all the cost involved the initial cost of purchase.
So you can talk to your parent, uncle or who ever and use their equity for your first purchase.
Kind regards
Chandara
[Keep going, you’re nearly reach the end of financial freedom]You will nearly always have to pass the mortgage insurance criteria if you are borrowing more than 80% of the value. A few exeptions are if you go through a non conforming lender such as Liberty or bluestone (but higher rates).
If pass the banks requirements, then maybe you could borrow the 20% from elsewhere intiailly. wait 6 months and then increase your loan to pay off your loan for the deposit?
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
Don’t forget, you can allways ask for some vendor finance if you are a little short of that 80% deposit.[
]Best Regards,
Andrew.
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Be Great today!
***************could you please explain what vendor finance is please??????
You can ask the vendor to accept say 80% of the money today and pay the other 20% off over an agreed time period. You can offer to pay him/her what ever interest rate you like, (0% sounds good to me, it depends how motivated they are to sell).
Remember everything is negociable[^] even in a hot market.
If you have not already done so, get your hands on Steve’s book, it is terrific for explaining such concepts.
Best Regards,
Andrew.
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Be Great today!
***************To Chan …i wish i had a rich family but it isnt the case tou are very lucky !!! I did have $70,000 equity in the house that i was living in but what stuffed me up was the fact that i had only been working self employed for 2 years and was earning very little but my partner was on a healthy wage but that didnt help unfortunately…now i have more equity so hopefully that will help and i am now earning better money in my business..thanks anyway for your advice
Thanks heaps for the explaination sounds great i havent heard of that one anything is possible thanks for giving me hope yes i am only a quarter of the way through Steves book i am reading it carefully and slowly to make sure the info. is sinking in
good on you Kristine.
good on you Kristine.
good on you Kristine.
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