We are going to be moving to the Gold Coast within the next month (if all goes as planned).
We will rent there for about a year to check out the area and see what areas are best to live in.
So, next year we will be looking to purchase our first home. We will have some money from our in-laws as a deposit and have some of our own (I’m deciding whether to put all of it into our own one or keep some for a deposit on an investment home later).
Which kind of loan would you recommend for our first place? Line of Credit? 100% offset? …
Hopeful, keen and learning.
Put all the cash you have in your PPOR, then when you are ready to buy an investment property you may be in a position to borrow 105%.
Your bank will know how much you can borrow.
Perhaps I should rent for only 6 months and get my own place as soon as I can?
We should have about $35k to spend. We have a few other Personal Loans (probably about $10k worth).
You may consider paying out your personal loans with the money first, this will increase your borrowing power.
Why don’t you consider buying an IP now, with the market still solid on the Gold Coast, you should get a solid capital growth in the next 12 months. Save what you can in that time and I believe you will be in a better position to purchase your PPOR compared with just saving for the next 12 months.
For example if you assume 10% capital growth on a $250k IP, this will provide an additional ~$25k in 12 months, plus savings. If you elect to save, you can get around 5-5.5% say in an ING account.
In 12 mths, you can use equity in IP & savings to but PPOR if you want.
James
Don’t pay out all of your debts yet!!!
Wait until you have a plan and know whether deposit or increased income is more important. Talk to a broker and ask him/her to run some figures for you.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Thanks guys!
Hopeful, keen and learningJust pay out the bad debt and leave the rest in the loan where you can access it any time by way of redraw or use the equity to invest in ips.
Warm Regards
ChanDollars
[Keep going, you’re on your way to financial freedom]Chan$,
You suggested paying out the bad debt.
Whilst this is good general advice you need to be careful.
Remember that lenders need to see genuine savings. If you encourage people to pay out their bad debt it may then be that they have no savings left and this will put them back 6 months whilst they recreate that genuine 6 months savings pattern.
After they get professional advice we can then see if they have enough to do this. Some people have enough income to service all the debts and a mortgage where as they may not have the deposit saved to buy a home and pay out the debts.
I hope you can understand my reasoning. Please let me know if I can explain it further.
[
]Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
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