Hi all
I'm new to the country (5months) and would like to purchase my PPOR this year. I've been studying and gaining knowledge to move into property investing with this first purchase getting me in. My question is, is there a certain way i should structure the mortgage agreement which will set me up for maximum borrowing power when i find another positive cash flow investment property.?
Bearing in mind that this PPOR will also eventually become an investment property at some stage. I would like to get it right from the beginning and would not want face a situation where i realise i could have done things differently and hinder my chances of securing additional finance to invest.
So a solid foundation is what i am after i guess.
Thanks
In short having an IO loan helps with servicing with several lenders as many take the existing repayments instead of the principle and interest repayments.
Do you have permanent residency or are you here on a Visa? There are restrictions to consider for non-resident applicants.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
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Without knowing the finer details of your situation – interest only on all properties with an offset attached against your PPOR is a good way of improving your future serviceability.
Keeping consumer debt at a minimum will also help.
If you have a credit card – keep it at a reasonable limit.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
I'm on a Permanent Resident Visa, which to my knowledge doesn't have restrictions. If this statement is incorrect please let me know.
@jamie M – what finer details would you like me to reveal? I'd be more than happy to do so for if you can assist in fine tuning the application.
I'm married and my research tells me to perhaps take out the loan in my wife's name and stand surety/guarantee only. Two mortgage brokers weren't to happy for me to do this.
Thank you for your responses
If you are a Permanent Resident then that's fine.
There are no issues with the above – why did the brokers say that they were not happy to structure it this way?
Why are you looking to structure the application that way?
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
kidcantona wrote:I'm on a Permanent Resident Visa, which to my knowledge doesn't have restrictions. If this statement is incorrect please let me know.@jamie M – what finer details would you like me to reveal? I'd be more than happy to do so for if you can assist in fine tuning the application.
I'm married and my research tells me to perhaps take out the loan in my wife's name and stand surety/guarantee only. Two mortgage brokers weren't to happy for me to do this.
Thank you for your responses
Hi again
Happy to look into your situation – there's a form on our website that you can download and email in.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Thanks Jamie M i'll get that to you shortly
Shahin, i'm not sure about the broker's reason i didn't actually bother to ask. Was a casual conversation but my thinking behind that is to free up my salary for borrowing again in the future.
So i get home this evening and my wife says she'll rather wait and get something equal or better to what we are currently renting. In the meantime we should perhaps look for a positive cashflow investment property. I've read that many investors do this as the rent is much cheaper than an installment on a mortgage.
I know i will loose the grant we are eligible for with a purchase like that but does it mean i can never claim that FHOG when actually purchasing our PPOR?
You can apply for the FHOG if you've purchased an IP previously – as long as you haven't lived in it. That's assuming that you qualify for the FHOG in your state/territory.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Thanks alot guys.
Cashflow positive properties are not easy to find. How are you calculating cashflow positive?
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
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Indeed they are pretty hard to find., the only formula i have is the one Steve suggests in his book. 80% deposit is alot to come up with when just starting. I'm going to have to get creative.
What's your take? I've actually seen one a few minutes ago currently tenanted which could be positively geared. Would it be advisable to acquire the services of a coach you see in the API magazine? All of them tell you what they can do for you but they make no mention what's in it for them.
For me cashflow positive is deducting all the outgoings (this both upfront and ongoing), council, maintenance, building insurance, landlord insurance, etc from the rental income and potentially the negative gearing benefits.
Instead of a property coach align yourself with a good Solicitor/Conveyancer, Broker or Banker and Accountant.
Why a good Solicitor? You need them to be quick,responsive and knowledgeable particularly when it comes to things like SMSF transactions. If you need to jump onto a deal then you need them to order the Building and Pest inspection same day.
Why a good banker/broker? You need to to structure the loan correctly, put you with the right lender not just for what you want to do today but also in the future. For example you have just purchased a property and want to build 3 properties on the one title at an LVR of 90% – you shouldn't go to ANZ as they maybe cheap today but will cost you later on.
Why a good Accountant? They need to give you appropriate tax and structuring advise particuarly if you need to set up a trust entity.
I am also a fan of BA's. I think there are some good ones out there that find excellent deals for customers and they are worth their fee.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
If i was starting today i wold rent rather than buy and purchase investment properties instead. There are a number of advantages firstly they will take 80% of the rent into calculations when buying an investment, so you can generally afford to buy a better investment than you could afford to buy as an owner occupier. This of course often means you could rent a property in an area in which you could not buy.
An investment is tax deductible where your owner occupier home is not. If you are self employed it would also be quite easy to claim around 50% of the rent.
Finally if you are going to buy an investment depending on what you can afford to buy I would be aiming to buy in an area that provides strong capital growth.
Nigel Kibel | Property Know How
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Excuse the typo earlier on and the double entry, i meant 20% not 80%.
One thing is clear, it takes alot of work for every deal, big or small. It's a nervy thing to move into property investment, however my willingness to learn will get me though it.
It's been my intention to keep renting and make a move for an IP first, the hassle of inspections and outrageous landlords is rather off putting to say the least. It's a price i'm prepared to pay though, the key was convincing my wife.
Your comments are invaluable. Thank you
Kid don't waste time just get Jamie on the job and get it sorted professionally.
Just out of curiousity where were you an original resident of ?
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
That's the kind of response i appreciate. I'm from Cape Town South Africa. Mate
Ok Cantona won't hold that against ya.
I'm a pom originally so good mix on the forum.
Happy Australia Day everyone.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
@jamie: Just a quick question please, if I only owned investment properties in NSW and never lived in it, I can still claim and have a FHOG approved?
Cheers
Yep, should be able to if you've never owned/lived in a PPOR.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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