All Topics / Help Needed! / Advice for a newbie

Viewing 6 posts - 1 through 6 (of 6 total)
  • Profile photo of mattsmatts
    Participant
    @matts
    Join Date: 2012
    Post Count: 5
    June 22, 2013 - 12:36 am

    Hi there,

    Just a newbie to the investing journey and am after some advice on our situation, have posted once before  but situation is a little different now.

    Currently have a house that has been valued at $300,000, current mortgage is $240,000. Family has grown and we are looking at a new home and would love to keep our house as an investment property but have no real savings for a deposit for the new house. Is it possible to use the equity in our house to pay the deposit for the new house or should we perhaps rent out our current PPOR and save for the deposit in due course??

    Also, is an option to stay in the house and convert our loan to a interest only and save for a deposit that way??

    Sorry if it seems basic but I'm new to the caper.

    Any advice would be greatly appreciated.

    Cheers,

    Matts

     

    Profile photo of Amy WhiteAmy White
    Participant
    @amy-white
    Join Date: 2013
    Post Count: 13
    June 22, 2013 - 3:41 am

    Hi Matts

    Might be a little tricky to use the equity because the lenders will tend to do only 80% lend on refinance. 

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    June 22, 2013 - 5:13 am

    Yes you can, lenders will lend up to 95% of both properties,

    The problem you will have will be tax effectiveness. You will be borrowing 105% for the new one and paying LMI but neither the interest nor the LMI will be deductible.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

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

    Profile photo of TheFinanceShopTheFinanceShop
    Participant
    @thefinanceshop
    Join Date: 2012
    Post Count: 1,271
    June 22, 2013 - 5:16 am

    You can refinance your property at 95% with most lenders and most likely go to 90% with your current lender. 

    Based on the a property amount of $300,000 – even though there is LMI payable I would be comfortable with going to 95%. 

    The big variable will be the valuation so I would consider ordering several upfront vals. Most lenders offer this, its free and if you proceed with the loan you can use that valuation.

    TheFinanceShop | Elite Property Finance
    http://www.elitepropertyfinance.com
    Email Me | Phone Me

    Residential and Commercial Brokerage

    Profile photo of PLCPLC
    Participant
    @plc
    Join Date: 2012
    Post Count: 400
    June 22, 2013 - 4:57 pm

    I must have missed the memo. Since when and who are you allowed to refinance with up to 95% LVR?

    Only 95% refinances I know are dollar for dollar moves. Anything involving debt consolidation and/or equity release is max. 90% from what I know.

    Cheers

    Tom

    PLC | Phoenix Loan Consulting
    Email Me | Phone Me

    Melbourne based Mortgage Broker | Making Finance Simple

    Profile photo of TheFinanceShopTheFinanceShop
    Participant
    @thefinanceshop
    Join Date: 2012
    Post Count: 1,271
    June 23, 2013 - 9:54 am

    Plenty of lenders – just did one today with Westpac on a vacant land at 95%. 

    TheFinanceShop | Elite Property Finance
    http://www.elitepropertyfinance.com
    Email Me | Phone Me

    Residential and Commercial Brokerage

Viewing 6 posts - 1 through 6 (of 6 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.