Hi, Please be patient with my ignorance - I'm new to the game. Problem: I have a 3 bedroom house (owe $266K), 2 dependants with 1 on the way. I had previously set my heart on extending the house both up and out but as it turns out, there would not be much change out of $200K and my current lender will not exceed 80% of the current value of the property which is around $500K. Add to this our need to upgrade our family car also. So I'm left with a number of options but would appreciate some guidance from the brains trust (that's you). Option 1: Re-finance with a major lender to >90% of est value and pay the $10K mortgage insurance (might be enough to do what I want build wise, but certainly not the car). Option 2: Keep the house, rent it out and buy a larger house (and car) with a view to using the equity in the second house in say 5 years time to pay for the extension on our first house. Option 3: Stick with our current lender, borrow up to 80% and do a different extension which will see us adding two ground floor bedrooms and extending our dining/kitchen area. (refinance for the addition of a car??) Option 4 is to sell our current home and move. Unfortunately, we love the house too much and can't bear to part with it permanantly. I sort of get negative gearing but only in lamens terms. I am keen to build a property portfolio for my future security (and that of my children). Hoping you can help. Trev
Or 5. Keep house and rent it out and rent yourself. Take advantage of deductions without losing the CGT exemption and pay a lower rent (lower than mortgage on a similar property). It will be hard to get finance on estimated value. What you would need is a fixed price contract and they would lend based on that.
