I moved into our home 3 years ago. Its a 3 bed, 1 bath home for a family of 4 that includes 2 school going kids. 1 bath can be a recurring issue in the mornings. Having said that, I like the home as its mine. I would love to wholly own this home at some time.

We have recently started looking at investment properties. Our current mortgage is with one of the big 4 banks. So we went to talk to them about this. We told them our conditions and estimates and they gave us the initial thumsup.

We had another meeting with them where we had to sign papers and tings were diffrent. During the past week the interst rates had jumped by 0.25%. It was a bit higher but manageable.

To our shock, on the second visit, we were told we were going to take up only a smaller amount equity released. We had told them we would use none of our offset but all of the equity from our PPOR, if required, to purchase our investment property. Our offset keeps cash available to us and reduces our interest throughout the year.

We funnel all our income into that offset and I have set the only credit card we own, to that offset. Every cycle , the credit card balance is automatically paid off in-full, from our offset. As our offset gets bigger slowly (after expenses and emi), it eats into the interest component of our emi. So all in all, it has been going ok. A bigger chunk of our principle gets reduced and I pay the bank lesser and lesser every fortnight.

So, when the banker said we can only take a fraction of our equity released and not the entire amount, we were a bit shocked. Especially when last week, we were told the entirety of the equity could be released for our next purchase.

The reason for that change , was cited as this. One of us is on the title and the loan; I am not. The investment property will be in my name. I dont know why we set it up lik this initially, but thats how it is now. The new equity released loan will be under both our names. The new property will be in both our names.

Well, this is what we told hte banker. He said due to the way the title and loan for our PPOR is under my spouse’s name and the new property and loan will be under both our names, the equity released will not the entire amount (80% of total equity). What we got was about 50% of that amount, which was surprising.

We also informed him of my plan. My plan was to go interest only on our PPOR as our interest is quite low now – $7xx per month and reduces every month by a few dollars. Going interest only will put more money into our pockets and help us plan this next property better as we have more money. This would be for 5 years and will help us catchup on other investments. We are not young; we need to catch up on our investments.

What could have changed the banker’s mind? Is it because of my plan? Does going IO on our PPOR scare the bank that they think we should be forced to pull money out of our offset at all costs?

Or was it that we havn’t paid as much interest as a normal customer would have paid over the 3 years that we have had this loan? Or that we absolutely don’t want to touch our offset and insist on only using our home equity for the next purchase?

The offset assumption might be right. I say this because when we brought up a certain request to secure our offset with MFA, we were told the only sure-shot way to secure our accounts was to pay off the loan. Now, someone would have to be high to get rid of all their cash to implement a loan payout whose only immediate beneficiary is the bank and you are at immediate loss. All your money is now in the bricks of your PPOR. So technically , the bank suggested that the only way to totally secure your savings is to get rid of it!!

Lets see how it goes. We have started speaking to a mortgage broker after the second meeting. I want to keep my options open for now and check what other banks think of our situation.

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A year before we bought the home we live in, or rather a few months before we actively started looking at homes for purchase. This came at a huge expense to us on weekends to just go around looking to open houses on weekends. Weekends are the only “free” time we have. There is no actual free time , you see we have kids and we have chores to do on weekends.

A year before we landed this home and we started our search etc, we had our kid have a diagnosis of early onset myopia. She is too little to have short sightedness at this age, especially since we dont have a TV and we discourage screen time at home. We cant avoid it at school , but what can we do? We did allow her to read, which she overdid .. a lot , now that we think about it. Now that I think about it, I used to find her under tables or lying in our dark living room in our rented apartment (that room had light issues). I cant help blaming myself for not catching that on time. Well, hind sight in 20-20, isn’t it?

So when we went looking for homes, we actively looked for a home that had a backyard. We bought this house, although it was old and not very close to CBD where we worked, I liked that it had a larger backyard. I fell for the backyard actually. And I can say that we have used the backyard to the hilt. Our kids play there most of the time and we actively send them out if we can. Even though our home is light and bright and airy, and I love it, I send my girl out to play. My research into this topic, showed that more sunlight is what is needed to keep eyesight healthy in young children. Humans of all ages can benefit from sunlight, is what I read frequently.

So, we bought a somewhat large by typical standards. We prioritised that as a positive point for purchase. Every family is different, but finding a home that best suits your priorities can be challenging but is totally possible.

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No major issues faced yet, but we have had a mouse problem in winter. Other than this, there have been no major issues. There are occasional slugs and small centipede like insects that show up inside the home.

These homes are new to me. The construction of these homes are less stable and show feeble interiors as they age. Especially those that do not contain a brick wall anywhere in the structure. Although that is not the case for our home.

Mice problem is recurrent only during winters. We came to know the mice live between the dry wall and the brick wall. It is next to impossible to get rid of them without poisoning them. However, we chose not to as its not what we want. Poison ends up in the food chain that might harm more animals than the ones we intend to harm. It also contaminates nearby water sources. We have temporarily fixed the issue by setting traps around the house and blocking all entrances where the might sneak in.

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Its been around for a while on the listings page of realestate.com.au. We had only recently shifted our focus to this part of the western suburbs. It pans well for our other parameters such as distance to school, crime stats, etc.

We got an asbestos inspection done on the property before making a deposit. It came out clean inside as it had been recently updated. However, there were some places outside the home and under it where non-friable asbestos was found. We made an offer on the property subsequent to this.

We have since contacted the same agency that performed the inspection and tests to quote a price for the cleanup. If everything goes ok, we are good to pursue this further and close the sale if all goes well.

We plan to ask for a 10 working day cooling period and enough time for us to thoroughly do a structural inspection of the property. This property is more than 40 years old and is built on piers, as are most properties from that time.

For us, the sale was more or less down to the fact that the house was remodeled recently. It was highly likely (although not certain) that any asbestos discovered during the remodeling process might have been removed. It turned out to be true as the inspection showed.

The location is very nice and we like that vicinity is super quiet. My kids are noisy; I guess they will stand out pretty quickly in that place after we move in. The constant bickering is loud enough to wake the dead!

The land slopes down to the back of the property. The courtyard is quite spacious with the house occupying one of the corners of the land. This works best for us as we want the maximum space available for the courtyard. Even the deck is very close to the house and is in one corner leaving a large part of the courtyard free for use by children.

Hoping everything goes well in the coming weeks and we secure the deal !

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I can see prices are dropping, a little at a time. Some of the properties I have been finding that slashed their prices in larger chunks were those bought during market highs – Dec last year (Dec 2021). Others are investment properties that were bought in 2020 or thereabouts.

According to some reports, even if the market falls by, a whopping 30%, it is only going to be back at 2020 levels. That shows how high prices have been over the last couple of years!

Auction rates have slowly increased, I think probably due to seasonal purchases. Only in Australia have I heard of property-buying seasons! It’s like everyone decides, “hey, it’s spring, let’s shop some properties…. ” ?

As a first-time home buyer, this market is a little puzzling to us. I have not heard of houses selling in auctions this frequently, as if they were original masterpieces of Van Gogh or Monet found accidentally in someone’s attic! These are pretty ordinary houses, why are they so much in demand that they have to be auctioned? It’s not like there is a low supply or anything. Or is there?

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The site is https://microburbs.com.au. It’s free to use and awesome!

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It starts to show up on the real estate websites about a week before the rate increase by RBA is set to be announced. Not sure why this is happening.

Although it appears now there are more houses this month than there were about a month ago. I think if there wasn’t a glut before, it will show up now.

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Until we got hold of the structural inspection report. This house is close to a storm drain. Not only was there a termite and borer problem, but it also had its piers shifted at an almost 60-degree angle. This might be because of soil erosion due to rainwater rushing towards the storm drain from the road.

It was the strangest thing I ever saw. I am shocked a house could shift in that way. If I were to look for positives, at least the inspection was done very well!

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Although the house is an early 1980s build, asbestos is found behind the switchboard, splash back tiles in the kitchen, and wet areas in the bathrooms.

I liked this house. I was hoping that this test came out clear. Very disappointed today :(.

Search begins in earnest again tomorrow morning…

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