Hi guys,
I’ve graduated from Uni in 2005 and I am busy saving up money for a deposit for a house. I have almost saved up $20,000, I have a car and am boarding at a friends house for $150 p/w including all bills and food. I have two questions that I want advice about:
Firstly, even though i’m probably not looking at buying until early next year how soon before buying should I get pre-approval? Also, if I go through a mortgage broker is it going to cost me anything to get pre-approval? Also, what happens if I get pre-approval from one bank and in a few weeks time another lender offers better interest rates?
Secondly, is it better to buy a house, take the FHOG and live in it for 6months and then move back with my friend and rent it out, or should I buy in immediately as an IP and not get the FHOG? Keeping in a mind I don’t have a lot of furniture so I would have to buy all that stuff if I want to live in it.
Thanks
Paul [suave2]Hi Paul,
congrats on taking your first steps towards property investing, now onto your questions:
1. No it won’t cost you anything to get a pre-approval.
2. I don’t think there are any implications to having multiple pre-approvals, essentially you’re running a scenario and filling in paperwork to speed up the process should you find a property. Bear in mind though that the preapprovals with have a 3-6 month lifespan before you need to resubmit paperwork.3. With regards to FHOG and whether you should take it or not, guess this is dependant on your personal financial situation. I.e does the first home owner grant offset any rental income, depreciation, interest payment tax offsets, etc etc that you could be claiming for that 6 month period that you’ll be occupying your house. I recently watched a report on one of the evening news shows where a financial advisor told a 23 yo girl to buy an investment property and not take the FHOG, granted she was living with her parents so her living costs were low. Guess what I’m saying is crunch your numbers and see what works best for you.
D.
Pre approvals are only valid for 3 months generally. So it is better not to get in there too early.
Terryw
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Hi,
Thanks for your responses. It sounds like its not worth the hassle of pre-approvals until i’m serious about submitting offers. Does that mean that pre-approvals specify the bank/institue that the approval has been given? I will assume so unless otherwise told.
I suppose its hard to crunch numbers the first time for a property when I don’t know how much depreciation I would be recieving? Is their a web site or somewhere I can go that outlines everything that can be depreciated and everything that can’t?
Thanks again for your responses
Paul [suave2]
Yes often i find that a pre-approval is a waste of time as if recommend a lender today and in 4 months time the client wishes to proceed the choice of lender may have changed.
To obtain an accurate indication of what you can claim you will need to undertake a Depreciation report on the actual property.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner.
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
So once you get this pre-approval and you go out and buy a house in that pre-approval range then you go back and they give you a loan as they have sorta already approved it.
Also is pre-approving a loan the best way to finding out your borrowing capacity with what you have??Thanks,
ChristopherChristopher – To find out your borrowing capacity a lender or good broker will be able to do this for you without going all the way with a pre-approval.
Every pre-approval will show as an enquiry record on your CRAA and if you decide to run with another lender when it comes to the purchase could cause you a problem if you have too many.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner.
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
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