Personal Loan with Mortgage Loan

[yafeda10]

Hi guys. I'm currently paying rent of $260 p/w while trying to save to get in to the property Investment game. My plan at the moment because my parents house is too small for us to live, Ive decided to save up for a cabin that will go behind their house on their property. The cabin price is 30k, so I'm going to put in 10k Deposit and hoping to get a personal loan for 20k. The repayments for the personal loan works out to be $91 per week. So I'll be saving a lot more towards my first home then trying to save while paying $260 rent p/w. I want to save up 20% so I'm not in a rush. So the question is because I have a personal Loan, is this going to affect me getting a mortgage loan for my first home?
The only reason why I'm getting a cabin so when I rent out my first home I can go back to the cabin to stay while I save up for the next property. And if I'm negatively geared I can still afford to pay as my cabin will only cost me $91p/w.

[Andrew1701]

Best thing to do would be discuss you plan with you bank before you go ahead =)

[yafeda10]

Thanks Andrew.

[Anthonyacat]

Having a personal loan will certainly impact on your ability to get a mortgage. But that doesn't make this a bad move.

There are lots of other issues at play here, such as consents, utilities, who owns the cabin, etc, but I'll put them to the side and assume you've considered it already, and just place a separate question:

Why would you save for a deposit, while holding a personal loan? Your deposit savings are earning you 2-4% in a bank, while an unsecured loan costs 12%+.

It also sounds like you're looking to buy a first home, live in it for a while, then rent it out and move back into the cabin? Seems like a lot of unnecessary movement to me. Why not just stay in the cabin and buy a rental? Simplifies everything.

If your parents are willing you could even get them to lend you some of their home's equity, to reduce overall interest rates (both on the cabin personal loan, and on the eventual property purchase) and allow you to buy the property earlier. Family situations can get complicated though, so important to have good agreements in place.

[yafeda10]

Having a personal loan will certainly impact on your ability to get a mortgage. But that doesn't make this a bad move.

There are lots of other issues at play here, such as consents, utilities, who owns the cabin, etc, but I'll put them to the side and assume you've considered it already, and just place a separate question:

Why would you save for a deposit, while holding a personal loan? Your deposit savings are earning you 2-4% in a bank, while an unsecured loan costs 12%+.

It also sounds like you're looking to buy a first home, live in it for a while, then rent it out and move back into the cabin? Seems like a lot of unnecessary movement to me. Why not just stay in the cabin and buy a rental? Simplifies everything.

If your parents are willing you could even get them to lend you some of their home's equity, to reduce overall interest rates (both on the cabin personal loan, and on the eventual property purchase) and allow you to buy the property earlier. Family situations can get complicated though, so important to have good agreements in place.

Your right on the money there my friend. The thing is my parents dont like risks so they're not going to bother.
And yes that is the idea of the cabin using it as a Head quarter to move back too after renovating and getting tenants.
Im well aware of the extra cost such as consent etc.
I know it seems like unnecessary move but it still costing me less having to pay rent and trying to save for the 1st house long term.
Anymore suggestion thanks for the input. Anthony

[donthatetheplayer]

Where are you based yafeda? If Auckland you will need 30% deposit.

[yafeda10]

Where are you based yafeda? If Auckland you will need 30% deposit.

Im based in Wellington don..