I am a sole parent and have a mortgage left of $50,000 on my home. My home is worth about $300,00. I own outright an investment property which has a rent of $170 a week. I do not work as I have two young children not at school yet, so I only have a pension coming in.
I would really like to buy an investment property in say Tasmania for $70,000. Would I be able to get a loan and if so what sort of structure would be best for my situation? I was thinking of an interest only loan.
Please advise as I really need to start trying to secure for my children's future?Hi Goodenergy.
You should be able to get a loan of up to 70% of the value of your investment property. You can then use these funds to pay cash for the property in Tasmania. You may qualify for a No Doc loan if you have been self employed for at least a day.
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
Sorry what is a no doc loan and how does is work?
Sorry, a No Doc loan is a type of loan in which the lender does not ask about your income. They just ask if you are self employed, have good credit and have a deposit. Rates are slightly higher than normal loans though.
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
Hi goodenergy. Please remember that while being creative can pay off, unless you get a no doc loan, which are few anf fare betwen now competitively, you will need a lo doc one, which means in most cases you have to declare an income to 'service' the loan (although rental income counts of course) and that you are self employed. Some people call them 'lie docs' for that reason I guess. Be careful you do not leave yourself with a loan that can't be paid due to unforseen circumstances.
As a sidepoint, you may have some difficulties with some areas (postcode restrictions) as on this type of loan lenders mortgage insurance applies, and this can restrict the area you purchase somewhat. Probably no need to rush into anything at present – there does not appear to be too many areas booming price wise. But definately being ready to act when you find something is a good idea. Congratulations on where you are at property wise too – some great equity there, and a very low debt level.
All the best.
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