Sunday 26 February 2023

Million dollar mortgage

The purchase of my off-the-plan investment unit finally settled last Friday. I had paid $100,000 deposit back in 2019, plus $41,000 stamp duty, so the balance of $900,000 was due upon settlement. However, the residential mortgage approval required I pay off and close down some of my existing credit cards and lines of credit, plus our existing $37,000 home mortgage had to be paid off and also the $90,000 or so owing on 'portfolio loans' against our home equity. The balance of the investment unit purchase price and our remaining home loan and most of the portfolio loan were paid off using the new $1 million residential mortgage, and I also had to transfer $40,000 into the bank account that will be used for the monthly mortgage payment direct debits and which was also used to pay off any part of the portfolio loan balance that couldn't be covered by the new residential mortgage. Around $31,000 was taken from that account for settlement, which probably also included a few thousand in bank loan fees, valuation fees, title transfer fees, adjustments relating to pre-paid or owing rates, land taxes, insurances etc.

The opening balance of my 'million dollar mortgage' is shown below - quite an impressive round number in terms of debt IMHO. Next step is to collect the 'settlement box' which will contain the unit keys etc. on Monday morning, do a quick check of the apartment (I think the balcony railing needed a final wipe over), and then I'll hand the apartment keys to the managing agent to show the unit to prospective tenants. Hopefully it won't take too long to find a tenant, and the rental ends up being somewhere in the estimated $700-$750 per week range ($3,000 per month). Given that the monthly mortgage payment is $4,705 and that there will be other outgoings deducted from the rent income, I hope the unit doesn't have extended period of vacancy.

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