Long time no see (or is that read?)!
I've eluded to my financial challenges and future real estate investment strategies in recent posts (including a post within the #leofinance community), and for close to two years I have been experiencing tunnel vision in regards to my financial situation. This has created a lack of inspiration for posting on Hive and Steemit. And this, coupled with the Steemit drama that resulted in the creation of Hive, made my posting on these platforms very infrequent indeed.
But things have developed! In my post to the #leofinance community I spoke about a loan refinancing strategy that I was attempting to pull off which would allow me to:
- refinance my investment property to new and much lower interest rate.
- consolidate my remaining business debt into my investment property loan.
- create enough remaining capital to put down a deposit on a home for my wife and I to live in with no cash deposit needed.
And incredibly, the cheaper interest rate that we'd have on our new home loan would require payments less than we're currently paying in rent.
All up, the strategy would result in more debt (over $1 million which is incredibly scary) but would free up from $1500 to $2000 in monthly cash flow. And even better, our monthly payments on the investment property could be converted from interest only to principal and interest with only $200 more in repayments. This means that I'm able to free up capital in two properties at the same time.
To pull this strategy off, I needed to convince the bank that:
- my investment property was worth $800,000. It isn't, but for some reason they appeared to be willing to believe it is.
- that my and my wife's income could service in excess of $1 million worth of debt. Thankfully, we can. So this part was easy.
So guess what happened today?
I'm still reeling from the news, and find it a little hard to believe. But after weeks of working on this, followed by many hours spent searching for suitable properties to purchase, we managed to pull off what should never have been possible.
- The bank accepted our valuation.
- Our finance is approved.
- We have signed contracts for the purchase of a new home in a fantastic suburb that is located in one of the best school districts and is therefore highly sought after.
What this now means is that on the day that we receive the keys to our new home, my business debt will no longer exist. It will be rolled into my home loan which will be at a much lower interest rate, and therefore much easier to manage.
It also means much less stress, and it will now be a whole lot easier to move on from the financial disaster that I created a few years ago. And most importantly, we will now be back in a home that we own, rather than paying off someone else's mortgage.
