Hi All,
Ive just signed up to this forum in the hopes that my confusion can be cleared.....essentially my partner and I are looking at selling our current home and building a new one. we've engaged a mortgage specialist to see what we can borrow based on our financial situation, but this is where i become confused.
Our mortgage broker says that:
if we sell our property at worst case - $500,000.
based on the clearance of current home loans will leave us with approx $134,000 towards our deposit.
My partner and I have approx $29,000 in personal loans and credit cards which we want to wipe out upon sale of our existing place, which would leave us with $105,000 towards our deposit.
given that my partner and i will be upgrading and building, we want to keep $50,000 towards landscaping etc for the new place.
This would leave us with $55,000 as a deposit.
Using $55,000 as a 10% deposit, should allow us a purchase price of $550,000 which is a little less than the $650 we desire,
so I've enquired as to whether we can utilise the $55,000 as an 8% deposit + lenders mortgage insurance, which would allow us to theoretically purchase a $650,000 house & land.
But.....
on my income i have the capacity to borrow in the vicinity of $430,000 (my partner and i have decided that the property should be in my name initially)
so if my capacity to borrow is $430,000 + $55,000 deposit this would mean that we can only afford a purchase price of $485,000?
is this correct?
if my capacity to borrow is $430,000 + 100% of the remains of the sale of our current place ($134,000) this would potentially mean our maximum purchase price would be $564,000. Without paying off the personal loans and credit cards and having $0 remain at the end of the process for landscaping etc.
is my thinking correct? (i think I'm on the right track)
Ive enabled 'poll voting' but unsure what that looks like when i post, but i appreciate any guidance you may have!
Cheers
jono6466