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I can't borrow enough to buy an Auckland Property
I have an income of $41,000 and wen't to a mortgage broker at Squirrel which said for an investment property with 15% deposit I could borrow up to $230,000.
However, I live in Auckland and am looking to buy 3 bedroom properties in Te Atatu, Avondale or New Lynn. These properties cost around $330,000-350,000 which leaves me short about $50,000-70,000 including my $50,000 deposit that I have saved.
How can I get around this problem? Do I need to buy it joint with a friend, parents or family member to take their income into account so I can borrow more?
Can I do this with their income but still have the loan in just my name?
I have looked around at 2 bedroom units in the same areas but the unit blocks are attracting really bad neighbours and I can't add as much value to the properties on the exterior or in the landscaping.
Any help please?
Try BNZ, brokers can't accessthat usually. Ask for the BNZ property investment team.
OR try buy it as your own home and move out 6 months later.
OR try buy it as your own home and just ignore the 6 month rule and rent it out.
Contact Jerome DeSilva from Loan Market as he maybe able to help.
Why not look for a 2 bed?
350k will not get you much in Avondale for a 3 bed
Good one for saving that much deposit. That's impressive.
But I think you should seriously consider your ability to cope with disaster if you do get a $330K home. What if you lost your job and the tenants left? What if it needed a $10K urgent roof repair?
Just consider whether the banks might be right ...
If you looking to buy it purely as an investment, your rental income will be count towards your income. (at least 70%) This should increase your affordability, get a rental appraisal done and also get someone (your family friends for e.g.) to write a letter and say they are willing to rent the rooms once you buy the house.
Banks are rigid, you just got to play with their rule, even though the banker knows that you probably just got your friends to write the letter, but technically you have guaranteed rental income, then it has to be counted towards your affordability. Worked for me. Although my friends were seriously going to rent my house. But eventually we decided not to.
just make sure
1. you can actually service the mortgage ! ! ! This is the most important point.
2. the house can be easily rented out (i.e. attracting tenants).
3. Buy well, you will still have risks like One has mentioned, but if you can mitigate those risks, do your due diligence well and know roughly how much you need in terms of maintenance (in the next 3 - 5 years), have emergency funds for rainy days, choose and manage your tenants properly so they take care of the place etc
If you living in the house just rent the extra two bedroom out.
Last edited by SleepyTiger; 03-04-2012 at 09:37 PM.
If your parents are willing to act as guarantors, that would probably get you the loan. It's how I got started.
True, but dangerous for the parents. Easier for them (and safer) to borrow 25% of the purchase price and go on the title as 25% owners. You service their loan.
Originally Posted by drelly
Early in my career I bought a property by putting my parent's name on the title so their income was taken into account, my parent didn't have to pay anything or help me in any other way. I was sure of my arithmetic and my parent trusted me enough to help this way.
Possibly try shopping around different banks/brokers. Don't base your findings off one company. And try speaking to them face to face, it might help in the scheme of things. Well done on the 50k deposit though.
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