Is this possible for my friends to have been given this advice?
They purchased an investment unit 4 years ago for $205K and put $20K deopist and had to pay mortgage insurance. The unit is upstairs in block of 8 and they had no problems renting, no major repairs, no troubles etc. Renting currently at $245 per week.
They purchased it on 5 years interest free because that was all the bank would give them. They have 195K owing.
Now they are being told by their financial advisor that their unit has decreased in value to about $160K and if they refinanced they would be looking at 8K mortgage insurance. So they are better off leaving it as is and paying Principle and interest. They both have good jobs earning about $70K each and dont have any other property as they rent a modest house in Brisbane (about $400 a week rent). they would like to look at purchasing another property but with the amount their monthly payment will increase shortly and they dont' have any equity. They'd like to sell as they feel investing has been a waste of time and when they start paying principle and interest they will find it a drain on their finances.
I think they could get $208K refinance including the insurance and maybe get 5% interest free loan. They would still be positively geared and they could wait hope the house prices rise this year. What do you think?
They purchased an investment unit 4 years ago for $205K and put $20K deopist and had to pay mortgage insurance. The unit is upstairs in block of 8 and they had no problems renting, no major repairs, no troubles etc. Renting currently at $245 per week.
They purchased it on 5 years interest free because that was all the bank would give them. They have 195K owing.
Now they are being told by their financial advisor that their unit has decreased in value to about $160K and if they refinanced they would be looking at 8K mortgage insurance. So they are better off leaving it as is and paying Principle and interest. They both have good jobs earning about $70K each and dont have any other property as they rent a modest house in Brisbane (about $400 a week rent). they would like to look at purchasing another property but with the amount their monthly payment will increase shortly and they dont' have any equity. They'd like to sell as they feel investing has been a waste of time and when they start paying principle and interest they will find it a drain on their finances.
I think they could get $208K refinance including the insurance and maybe get 5% interest free loan. They would still be positively geared and they could wait hope the house prices rise this year. What do you think?