All Topics / Help Needed! / IP2, no PPOR

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  • Profile photo of cappy88cappy88
    Participant
    @cappy88
    Join Date: 2010
    Post Count: 16

    Hey guys, after some advice.

    My current situation, Im 22 living with my parents. Have IP1 leased around the corner and am currently working out a strategy for getting IP2. I have an offset account set up and am saving for a deposit…

    > Should I be trying to switch IP1 to an interest only loan to reduce repayments and maximise savings for new deposit?
    > Should I have the bank revaluate IP1 to draw on any available equity (purchased 9 months ago)?
    > Will a bank take into consideration with how much i can borrow that I live at home where I literally have no living expenses. No board, no food, and company car with a fuel card.

    If anyone has any other ideas or general comments I would greatly appreciate the help!

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    I would suggest IO for your loans, especially investments. You should save the same interest anyway if you have the offset (unless you are tempted to spend).

    You should be bale to apply for a loan increase too.

    Banks will take into consideration you living at home, some banks will assume you pay a small rent others may not.

    Hope you can keep on saving. I have tried to cut down my spending by not buying all the useless garbage i used to – I have even bought clothes and never worn them!

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    https://terryw.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Yep, good advice as always from Terry.

    Another reason for the IO option is that if you ever plan on owning a PPOR in the future, you can take the cash from your IP offset (which increases your deductible debt) and place it on your PPOR (reducing your non-deductible debt).

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Hi cappy

    The boys have certainly as expected given you good advice to date.

    Even though you may live at home and pay no board or rent most lenders will factor something in as expense and this will effect your borrowing capacity.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of cappy88cappy88
    Participant
    @cappy88
    Join Date: 2010
    Post Count: 16

    Your up and posting nice and early Richard. Thanks for all the advice guys, I’ll be giving the bank a call today to discuss IO.

    Kind regards, Matt

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    I think Richard might be posting from the otherside of the world (Europe) at present.

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Hi Jamie

    Hey mate been sprung.

    9.00PM here in the UK and Arsenal 2-1 up in the FA Cup.
    What else is one to do on holiday but post and watch football.

    Think i will have my hands more than full when i get back to Brisbane at the end of the month volunteering to help people who were effected with the floods.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of DHCPDHCP
    Member
    @dhcp
    Join Date: 2010
    Post Count: 190
    cappy88 wrote:
    > Should I have the bank revaluate IP1 to draw on any available equity (purchased 9 months ago)?!

    If it is not too late, you could do some research around the area similar to the type of property of your IP1 particular previously sold properties that are superior (e.g. good quality) but similar features (e.g. 3 bed rooms). Then, do another research of inferior properties (e.g. same features properties but sold less). In addition, if you've done some reno in your IP1, include this into your research and put everything together into a nice folder, label it with and present it to the valuer. Explain to the valuer the logic behind your research. Spend at least couple of days doing your research then provide him or her lots of research findings.

    You see valuers usually have a lot of properties to value on a given day. Often time, they don't have enough time to do a thorough research..hence they provide conservative valuation on properties besides getting sued if they getting wrong incase it foreclosure. The research materials you supplied them helps to paint a clear picture of what are properties sold in your area and it might give you a reasonable value of your IP1 which helps nicely to form a deposit for IP2.

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