Refinance now or wait?

Viewing 5 posts - 1 through 5 (of 5 total)

jojo
Participant
@melbjo
Join Date: 2015
Post Count: 18
February 17, 2016 - 9:46 pm
My key question right now is whether I should refinance my home now whilst I look for the IP I desire, or wait and finance them at the same time.
Advice I have had has suggested I wait, that way I have a stronger bargaining position or at least look more attractive to banks, given that I have a few things I really want in a loan.
On the downside, I really want to sort out my home mortgage. Firstly, I can get a proper pre-approval. Secondly, it is less to do when I finally make an accepted offer. Thirdly, psychologically I will feel more organised and confident, and my partner will also benefit a lot (he is into the IP idea but not as keen). Fourthly, I can get a better deal than I currently have, with a better interest rate and an offset account (currently have redraw and am sick of it).
Some background on the type of loan I want, and please feel free to comment on any aspect, I want to buy reno hold, I am equity strong but serviceability is our weaker area, I want an (IO) IP loan of 80% and an equity loan of some description for the deposit, further I want another equity loan for the cost of renovations. All with one bank, with a plan at a later stage to refinance the IP with another bank and purchase another IP in a similar fashion from the equity in the home.
All in all, is it really worth waiting, is the advantage of doing them together really going to be significant enough to override the downsides?
Richard Taylor
Participant
@qlds007
Join Date: 2003
Post Count: 12,024
February 17, 2016 - 11:26 pm
Hi Jojo,
If you are in a position of strong equity and weak servicing it wont be a matter of looking good to a potential Bank as every lender on a Coded loan will base its lending around your ability to repay the debt according to their own criteria.
Whilst most lenders have adopted a similar servicing as a result of the higher APRA requirements there are still alternatives.
Having both loans with the same lender is probably not a good idea especially if you want to grow your portfolio.
Too often investors focus on rate or a particular feature when they should be looking at the bigger picture and planning their choice of lenders around their ability to maximum their borrowing.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
jojo
Participant
@melbjo
Join Date: 2015
Post Count: 18
February 18, 2016 - 8:04 am
Thankyou for your reply.
My servicing ability is limiting the amount I can borrow but it is still enough to move forward and make a purchase. I guess this is the reason I would feel much more comfortable with a proper pre-approval.
The main reason I want the loans with the same bank is because I want and equity loan for the deposit and another for the renovations.
Wouldn’t having the loans with the one bank maximise my borrowing?
- This reply was modified 8 years, 2 months ago by jojo. Reason: add info
Jamie Moore
Participant
@jamie-m
Join Date: 2010
Post Count: 5,069
February 18, 2016 - 8:38 am
jojo wrote:
My key question right now is whether I should refinance my home now whilst I look for the IP I desire, or wait and finance them at the same time.
Get it sorted now.
If you’re relying on equity from an existing property so fund the deposit – then ideally you’d want to have those funds ready before you start looking for your IP.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
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Mortgage Broker assisting clients Australia wide Email: [email protected]
jojo
Participant
@melbjo
Join Date: 2015
Post Count: 18
February 18, 2016 - 2:02 pm
Thankyou Jamie.
Yes I have been wondering how I could pay the deposit if I couldn’t negotiate a $1000 deposit. If I paid in cash how I would get it back into the loan? The more I think of it the more I realise I need to do it. Talking through a problem really helps – and so does someone’s confirmation when I am going against advice given…
Do you (or anyone) know if I would need 2 separate equity loans, one for deposit and one for reno funds, or could they be combined somehow and if so is there any problem with it? Are there any conditions attached to getting an equity loan for renovations?
I have opened this question in a new thread in finance, as I think it is really totally separate, and I think I am resolved to refinance as soon as I am sure of my structure. Hope this is not against forum etticut.
With thanks,
Jo
- This reply was modified 8 years, 2 months ago by jojo.