Why is buying an owner-occupied home with a low doc loan advantageous?

Buying property can be a fantastic way to make sure your finances are secure when it comes to the future of you and your family. Having solid investments will ensure come retirement, there are plenty of sources to draw money from so that you can live out your days in the luxury and comfort that you deserve.

When the market has turned around, the investment landscape will be ripe for the taking.

At the moment, buying an investment property and expecting great rental yields from it to help pay off the mortgage is going to be difficult. That’s according to a CoreLogic RP Data report that shows how rental yields have steadily dropped over the past year. With that in mind, it might be worth moving into a bigger, better house than the one you currently own to stay current on the property market with a low doc home loan.

When the market has turned around again, the investment landscape will be ripe for the taking, but expecting immediate results at the moment is unrealistic.

So, what can you do to make a move on the market?

What’s going on with property right now?

CoreLogic RP Data’s monthly indices show that dwelling values have continued to rise over the past year – significantly, too.

In Melbourne, the figure currently sits at $797,150, but that has risen by 13.9 per cent over the last twelve months. Sydney shows similar increases, with the median dwelling value coming in at $984,790, a rise of 13.05 per cent.

It will be some time before the purchase you make becomes profitable.

While properties remain expensive to purchase, and rental yields are low, it will be some time before the purchase you make becomes profitable. That’s not a savvy fiscal move.

“We anticipate that the weakness in the rental market will persist over the year and rents will continue to fall over the coming months,” said CoreLogic Research Analyst Cameron Kusher.

“Factors contributing to a slowing in rental growth include falling real wages, excess rental supply in certain areas and lower rates of population growth – all of which have impacted on demand for rental accommodation.”

What you can do to keep the capital gains flowing, however, is move into a home with a higher value. These more prestigious properties are becoming rarer to find, and so more valuable, and that’s only going to keep pushing their values upward.

When the time comes to move into something a little more cosy and small, having purchased a home with massive potential for capital gains will leave you in a very comfortable financial position.

Thinking about making the move into a bigger, more valuable owner-occupied home? Talk to the team at Redrock today for advice about what the best mortgage solution is for you.