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thinking of purchasing IP at 23

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daniel | 23 Jan 2013, 07:56 AM Agree 0
Hi guys,

My longtime girlfriend and I recently married. We are both 23. We built our PPOR when we were 19 and moved in at 20. We currently have approx $90000 in equity and around 25000 in savings. Our combined income is around $155000 pa.
We are looking at buying a three bedroom townhouse for 210000 in Sydney's weat that currently has a long term remnant paying $290 pw.
We are excited to enter the investment market and have big plans for the future.
Does this sound like a good move given our current financial position.

Cheers guys,
  • daniel | 23 Jan 2013, 09:28 AM Agree 0
  • Madaline | 23 Jan 2013, 09:34 AM Agree 0
    Sounds like a great plan Daniel. Make sure you do you normal due diligence of course but you sound like you are in a great position to start building a solid portfolio. If you're thinking of more than one property - that is, building a good, profitable portfolio- I would recommend getting a mentor - not paying thousands of dollars for one of those spruikers that 'sell' their mentoring but someone who has done it themselves and is happy to share the love with others. Two guys that i really like are Ian Hosking-Richards from Rocket Property Group and Nathan Birch from B-Invested. Good Luck :-)
  • daniel | 23 Jan 2013, 11:36 AM Agree 0
    Thanks madaline. We have always been careful with our money so we will be sure to research a bit more. Another question I have is do we need to pay LMI is we are using an equity based deposit?
  • Madaline | 23 Jan 2013, 03:29 PM Agree 0
    Hmmm, logically yes, but I'm sure a good mortgage broker could let you know if there are any ways around this.
  • Camos | 23 Jan 2013, 05:22 PM Agree 0
    If using equity based deposit, LMI will be determined on two things,
    1-usually if your borrowing against your current property and you are going over 80% of its "Bank" value you will need LMI!

    2- it also depends how much your borrowing against from your existing property to put toward the IP, even though you may borrow against your Current property and it stays under the 80% for LMI the IP mortgage will also need to have enough equity(deposit/savings) in it to stay under the 80%!

    My advise is borrow the equity against your current property but keep it under the 80% mark then put your savings+borrowed against amount toward the IP! Then there will be no financial ties to each property! even if the IP has to have LMI then its no real drama its a small price to pay for a good IP.

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