Any advice on getting around bank servicing requirements. We have a Ak rental so it's got good equity, so we are wanting to buy a owner occupied house a do up to add value & to recycle deposit to buy another rental. But we are a one income family & have been told that we don't meet servicing requirements. How do investors get ahead on fixed incomes?
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Enough equity but not meeting banks servicing requirements
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Take the banks advice.
You can sleep easy at night and not become bankrupt.
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What type of rental do you currently own? does it have good cashflow ie pays all costs plus profit?
or is it more like an owner/occupier home (good capital gain) but poor return? if so you could sell current rental and buy one that has better cashflow, therefore enabling a 2nd purchase
other options are
1. Increase the rent
2. ask for a pay rise
3. get a second job
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Originally posted by Keys View PostTake the banks advice.
You can sleep easy at night and not become bankrupt.
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If you are moving from being a renter to an owner occupier consider the difference between your current rent payment to what your mortgage payment will be and also what your mortgage payment will be if you draw down/borrow any further funds to finance the renovation. If it is not much different or you think you can cover the cost then you should be alright.
Banks are being generous and interest rates are going to increase over time so make sure you can cover any increases in mortgage payments.
Thats my 2cents!
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Originally posted by nicko54 View PostIf you are moving from being a renter to an owner occupier consider the difference between your current rent payment to what your mortgage payment will be and also what your mortgage payment will be if you draw down/borrow any further funds to finance the renovation. If it is not much different or you think you can cover the cost then you should be alright.
Banks are being generous and interest rates are going to increase over time so make sure you can cover any increases in mortgage payments.
Thats my 2cents!
RossBook a free chat here
Ross Barnett - Property Accountant
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Originally posted by Wayne View PostYou do encourage a lot of dodgy moves Gary.
Don't disclose to the IRD bank contributions, lie on an application form ...
Like banks who actively help purchasers to fake rental agreements and fake boarder incomes, apparently that's kind of legit under the table...
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Probably the most sensible would be to look for higher yielding properties outside of Auckland (an overheated, over stretched market) that represent better value. You'll run out of servicing capacity very quickly buying auckland properties.
Other things to help, get a border, asb accept up to 150/week boarder income to be included as income from a servicability point of view, other banks take a % of the boarder income. Either way if you are confident you can service, get a border at least for the period leading up to the loan application.
If equity isn't an issue, pay off all overdrafts, credit cards and hire purchases; these all have an effect on servicability.
Can't help you with the kids situation. Don't lie about it though as that is fraud and very serious.
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Originally posted by Keys View PostTake the banks advice.
You can sleep easy at night and not become bankrupt.
Sounds like the O.P. has an inflated ego.
Originally posted by Gary Lin View PostI'm not encouraging it, I'm just saying there are ways.
Like banks who actively help purchasers to fake rental agreements and fake boarder incomes, apparently that's kind of legit under the table...Last edited by PTWhatAGreatForum; 24-12-2014, 03:21 PM.
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Originally posted by Gary Lin View PostI'm not encouraging it, I'm just saying there are ways.
Like banks who actively help purchasers to fake rental agreements and fake boarder incomes, apparently that's kind of legit under the table...
I realise banks in the past (esp. in the USA) would just turn a blind eye to a borrower's true circumstances but this did in fact end up costing those borrowers all that they had. And it's just not right.Squadly dinky do!
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