Hi there!
My partner and I are a young couple and are totally new to IP. Less than four years ago we were renting ourselves but, as rents were on the rise, figured that buying was a better choice. We managed to scrape together a 10% deposit and bought a 3brm house in West Harbour, AKL for $145K.
Our family has grown and the house is no longer suitable for our personal needs. Recent valuations by local real estate agents put the current market value at $250K - $255K. Our mortgage is currently $127K. Our family income is $56K pa. The capital gain on our property would give us quite a bit of equity to work with when shopping for a new home but, given our income, we don't think we can afford a giant mortgage on a new home - would need to borrow over $200K and the monthly combined cost of mortgage repayments, insurance and rates would be quite high.
We have discussed several scenarios but our lack of experience makes it hard to know what the "smart" decision is or even where to go for advice. We could:
- Sell our home and buy another to live in. We definitely want to live in this area.
- Sell our home and invest the capital gain elsewhere.
- Use our home as an IP and rent another house ourselves until we can save equity for a new home. (Are you always better off owning the house you live in?)
We are good at budgeting etc. but otherwise pretty financially clueless. They say it's better to ask a dumb question than make a dumb mistake though. So far we have spoken to a mortgage broker, real estate agents, our bank etc. It would be great to get financial advice from people who have no financial interest in our decisions though. We do have an appointment coming up with an accountant who we hope can advise us on IPs and tax etc. What questions should we be asking? Any advice would be greatly appreciated.
Thank you.
My partner and I are a young couple and are totally new to IP. Less than four years ago we were renting ourselves but, as rents were on the rise, figured that buying was a better choice. We managed to scrape together a 10% deposit and bought a 3brm house in West Harbour, AKL for $145K.
Our family has grown and the house is no longer suitable for our personal needs. Recent valuations by local real estate agents put the current market value at $250K - $255K. Our mortgage is currently $127K. Our family income is $56K pa. The capital gain on our property would give us quite a bit of equity to work with when shopping for a new home but, given our income, we don't think we can afford a giant mortgage on a new home - would need to borrow over $200K and the monthly combined cost of mortgage repayments, insurance and rates would be quite high.
We have discussed several scenarios but our lack of experience makes it hard to know what the "smart" decision is or even where to go for advice. We could:
- Sell our home and buy another to live in. We definitely want to live in this area.
- Sell our home and invest the capital gain elsewhere.
- Use our home as an IP and rent another house ourselves until we can save equity for a new home. (Are you always better off owning the house you live in?)
We are good at budgeting etc. but otherwise pretty financially clueless. They say it's better to ask a dumb question than make a dumb mistake though. So far we have spoken to a mortgage broker, real estate agents, our bank etc. It would be great to get financial advice from people who have no financial interest in our decisions though. We do have an appointment coming up with an accountant who we hope can advise us on IPs and tax etc. What questions should we be asking? Any advice would be greatly appreciated.
Thank you.
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