All Topics / Help Needed! / New to Property Investing – Tips/Help With First Home Loan

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  • Profile photo of ediot123ediot123
    Join Date: 2007
    Post Count: 54


    This will be my first enquiry into purchasing property. I would like to get into the property market and hope someone will be able to help me.

    I am currently earning approx. $40,000pa. I have approval from my father to be my guarantor and our family home with approx. $150,000 in equity.

    I currently do not have a deposit but am saving up for one. I want to hear your stories on how you have achieved your first property home loan.

    Because I'm planning to go in only with a relatively small single income, will this be very difficult for me to achieve a loan of say about 150k – 200k?

    Any relevant information/assistance will be greatly appreciated.

    Profile photo of hleunghleung
    Join Date: 2007
    Post Count: 141

    You shouldn't have any problems if your father is guarantor.  Have you gone to your bank yet?  There are some great mortgage  brokers around either on this forum or 

    Profile photo of Richard TaylorRichard Taylor
    Join Date: 2003
    Post Count: 12,018

    Hi Ediot

    Firstly welcome to the forum and congratulations on deciding to take that first step.

    A couple of things to bear in mind:

    1) Normally when using a family guarantee style loan this will assist in the shortfall in security but NOT increase your borrowing capacity as the guarantee is using limited to the amount secured against the parents home.
    2) This will only be available to you if the home is unencumbered as most lenders offering such a facility require a first mortgage.

    There are a couple of ways around this which i think are preferable meaning you father could still take out a loan against his property for his own use and not have to wait until your LVR was at an acceptable level.

    A good mortgage broker should be able to point you in the right direction.

    Let me now if you need further information. 

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of investor_eddieinvestor_eddie
    Join Date: 2008
    Post Count: 3

    Hi Ediot

    I'm glad you posted this because I am in exactly the same position :)

    Just wondering where do you plan on buying and if you are going for a house or unit?

    I am in Brisbane and finding it hard to find properties in this price range that have good growth potential.

    Profile photo of Millionaire in trainingMillionaire in training
    Join Date: 2004
    Post Count: 154

    Hi all
    If considering investing in property , think first about what you are wanting to achieve by doing this ie are you after Growth or income, or somewhere to live.  the choice you make will then help you determine an appropriate strategy, ie buy and hold, development, reno or a PPOR.
    If you are going for a PPOR, try to minimise your expecations, by this I mean  lots of young people these days think their first home should be at least 3/4 bedrooms, double garage and complete with the Plasma TV and home theatre, If you keep your expectations much less than this you will then find something more affordable and not have the huge mortgage that some find themselves subject to, which has th dobule whammy of increasing the pressure of interest rate rises if they continue to occur.
    If you are looking for a reno, look for something easy to do as your first one, ie, jsut a quick tidy up then sell it or rent it for more.
    Developments are probably for the more experienced as thee are lots more things to consider.
    In all these options, bear in mind the structure you plan on using for purchase as this can affect your cashflow/ tax situation if it is not correct, and it is expensive to sell a property from one entity to another from a stamp duty perspective.
    In addition to all this have you considered just buying a block of land and building on it, if use for a PPOR there are significant stamp duty savings to be had by using this approach, particularly if used for your PPOR.

    Just a few thoughts as others have answered the financing issue

    Warm Regards

    Profile photo of ediot123ediot123
    Join Date: 2007
    Post Count: 54

    Hello everyone,

    First of all thank you all for replying.

    hleung – I have not gone to see my bank as yet but figured I should seek some answers to the many questions I have about investing in property before making any appointments with anyone ( So I started here ). With the amount I'm planning to borrow ($150k) I think a unit would be most suitable at this stage. I have not done much research on which area as yet but I'm leaning more towards maybe the surrounding suburbs of Campbelltown-Liverpool (there are some good apartments within this price range).

    Richard – The idea of borrowing against my family home brings shivers down the spine of my parents. They do not believe in the idea of "good debt". It would be great if I could borrow against my family home and use a LOC to manage and purchase a few IP but that just won't happen.

    I want to get into property for the long term benefits (growth) and also to have a secure income in the short term will be the biggest bonus of all. As I am still living at home with the oldies, I want to make the most of my time here… ha ha!

    Do you think it is possible to have +ve CF properties within this price range.

    Who is the best person I should be speaking to about making my next step? – Applying for a home loan and then looking for a property.

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