- Hey everyone,
Looking to jump into the Perth/Adelaide market for my 2nd IP. Probelm is at the moment I have no savings due to paying of my credit card and renovating the bathroom on IP 1.
My 1st IP has a loan of $305,000 against it after purchasing in Feb 09
Valuation is around $400 – $425k
I have just signed a 12 month lease on IP1 for $400 a week
I have no other debt except for that loan
I currenlty live rent free and can do for the forseeable future
I earn $53,000paI can easily afford repayments of $2000 a month, not forgetting I will be renting out IP2
Looking to get into either the Perth market – $400k house
or
More realistically the Adelaide market around the $300k markWould I be able to get a loan for either of the above? Or should I save for the next 6 months? I'll be putting away roughly $2000 a month
Thanks everyone!
Line of equity loan on property one = est value * 80% – loan owing
loc= 425,000*.80 – 305,000
loc = 340,000 -305,000 =$35,000
Now Stamp Duty will be the big Killer it could use up the $35,000
Then you have Loan Mortgage Insurance this might be able to be added to your loan depends on lender.
But now after stamp duty and lmi you may have no deposit.(Highly Risky move – borrow some of the deposit off credit card and pay it off first at the very least $6000 could be borrowed as it takes 3 months for settlement and you have $2000 a month you can pay off it . You might be able to negotiate a longer settlement of say 6 months and borrow $12,000 from credit card for deposit )
It would be a good idea to talk with your lender or possibly with a mortgage broker about what the possibility would be.
You can add both properties together as security but it is risky as you can lose both if you can't pay a loan back.
Loan one 305,000, Loan two =$425,000 ,Property one 425,000 ,Property two 400,000
Total property values = 825,000 Total Loans = 745,000 (added $40,000 for LMI guess & stamp duty Guess)
LVR now becomes 745,000/825,000 *100
LVR = 90%
(You may be able to use a deposit bond from the bank in this situation for the deposit)It would be a good idea to talk with your lender about what the possibility would be.
At least you have some idea what to ask them !Duckster,
your example above is the same recommended by my mortgage broker in order to buy my second IP also.
From all the info on this site, i thought it was a huge mistake to join both properties together as security? If that is the only way possible in order to buy the second IP, is it still worth doing or would it be better to wait.Hrrmmmm I think its probably better to wait and save up at least the Stamp Duty and LMI then
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