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Poll: Is your debt more than 5 times your income?

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Results 21 to 26 of 26
  1. #21
    Join Date
    Jun 2004
    Posts
    9,111

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    Quote Originally Posted by donna View Post
    So Investors not able to refinance dump properties onto the market - kicking out tenants many of whom will still not qualify to be home buyers. This would be nasty at best - less rentals - more competition, higher rents = poorer standard of living etc.
    And someone who buys said houses won't then need to rent so freeing up a rental property for those who don't qualify as home buyers.
    So rents stay the same.

  2. #22
    Join Date
    Aug 2003
    Posts
    7,074

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    That would be the ideal however a likely scenario is cashed up 'big fish' investors may swoop in and grab the bargains paying a bit more for them than the FHBs.

    Isn't this just another step in the erosion of the middle class? The small time investors get squeezed out - the big players just get bigger.

  3. #23
    Join Date
    Jun 2004
    Posts
    9,111

    Default

    Quote Originally Posted by donna View Post
    That would be the ideal however a likely scenario is cashed up 'big fish' investors may swoop in and grab the bargains paying a bit more for them than the FHBs.

    Isn't this just another step in the erosion of the middle class? The small time investors get squeezed out - the big players just get bigger.
    Then there will be more rentals again so rents won't go up - it is the rent increase bit I'm looking at not who owns them.

  4. #24
    Join Date
    Sep 2013
    Location
    Auckland
    Posts
    776

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    I think the income multiple is too simplistic and will inevitably lead to problems.

    As the banks are well aware the issue when assessing risk isn't debt to income it is serviceability! The debt to income talk is purely to try and stop people from buying multiple houses. As others have said there are alternatives and it just will not work. All it will do is expose many, many individuals to even greater risk through non-bank lenders and higher rates/costs of business.
    Last edited by donthatetheplayer; 17-06-2016 at 09:57 AM.
    “Our favorite holding period is forever.”

  5. #25

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    If my LVR is over 60% (probably 70%) and I sell a rental for more than I owe the bank on the mortgage, can the bank or will they insist I pay the income off other mortgages until I am under 60% LVR

  6. #26

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    If the properties are with the same lender and they're cross collateralised then the bank is well within its rights to demand full nett proceeds of sale until your LVR is at a level they deem acceptable.

    The risk here is that if you spend any funds improving the property prior to sale those funds may end up paying down debt. Ie. If you spend $30k on new kitchen/bathroom that adds $60k to your sale price and the bank takes full nett proceeds then you have made a good investment $2 return for every $1 invested but if you needed access to the original $30k in the near future you may have trouble accessing it.

    my advice is to work with the bank before you put the property on the market, agree the amount of funds bank want paid back based on a given sale price and post sale LVR for the balance of the portfolio - get it in writing.


 

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