Further to that, OS, I just read a piece in my email from the Motley Fool – in essence it said something like “These are headlines you won’t see!” and went on to list how all news is about “today” – e.g. xyz share has plummeted 10%, (shock, horror) and quite ignoring the fact that over the previous two years, that same xyz share had grown 35%.…[Read more]

Hi OS,

It would seem that if there is a drop in values, the magnitude of any drop might well vary between states and regions.

It would have to, wouldn’t it? Truly there are multiple markets involved, and multiple factors all interacting. e.g. Sydney and Melbourne have had great growth, and have now dropped away some of that growth, while…[Read more]

Hi Micksta,
A few extra thoughts, thanks to your added information:-
1. The medians you quote for East and West ($565k and $445K) are wildly different to what you are wanting to look at buying (new $330k or old $260k). Am I missing something, or are there some screaming bargains in Burpengary?

2. On the subject of medians, there is a lot to…[Read more]

Micksta,
Run the numbers to get an idea what each +ve or -ve of either option will cost. Without knowing such numbers, it is hard to make good decisions.

e.g. What would maintenance of a 10year-old townhouse be expected to cost? Would it be $2k pa, or $5k, or $10k? Compared to that, what is the cost to you of paying $100k more on a…[Read more]

Hi Micksta,
Older properties also (often) have a larger block of land associated with them, making the purchase of the older property even more enticing. Many wish to buy new – but we often pay a price for wanting that. Older properties tend to offer better value in most cases.

Main thing though is that new estates often sell based on this…[Read more]

My son updated me – the project is “off and running”, thanks to those who contributed toward reaching that initial funding goal. Search for “Furzaid” to keep in touch as he strives toward his bigger goals.

My hat is off to the man!

Benny

Hi Fiona,
Some good words from Steven there – maybe some thoughts appeal to your current situation?

My thoughts are that the current situation calls for caution – i.e. have a little bit spare cash in your back pocket, and don’t go stretching. Maybe for you, that means selling one to bolster others. You haven’t shared any numbers, so you…[Read more]

Hi Toby,
From my recollections of what others (particularly Terryw) have said, I think your accountant might not be right. But then, I am no adviser – so you must depend on others.

Look for Terryw to pop up – and did you check out those links yet? I’m pretty sure Terry shared some really useful and “not well-known” info re CGT in those…[Read more]

Hi all,
A recent discussion re whether going from an IO loan to a PI loan would help serviceability led to some interesting learnings. From a Mortgage Broker(MB)’s perspective, it seems that a lender will only approve an IO loan by calculating it as though we were paying P&I (Principal and Interest) and at a higher rate (the Qualifying Rate). i.e.…[Read more]

Hi all,
A recent discussion re whether going from an IO loan to a PI loan would help serviceability led to some interesting learnings. From a MB’s perspective, it seems that a lender will only approve an IO loan by calculating it as though we were paying PI (Principal and Interest) and at a higher rate (Qualifying Rate). i.e. The lender needs…[Read more]

Hi all,
A recent discussion re whether going from an IO loan to a PI loan would help serviceability led to an interesting discussion. From a MB’s perspective, it seems that a lender will only approve an IO loan by calculating it as though we were paying PI (Principal and Interest) and at a higher rate (Qualifying Rate). i.e. The lender needs…[Read more]

Hi all,
A recent discussion re whether going from an IO loan to a PI loan would help serviceability led to an interesting discussion. From a MB’s perspective, it seems that a lender will only approve an IO loan by calculating it as though we were paying PI (Principal and Interest) and at a higher rate (Qualifying Rate). i.e. The lender needs…[Read more]

Hi Tobyn,
First off, I am not an adviser, but I might be able to point you to one….. Your situation sounds a little complex, but those “in the know” can usually point us in the best direction. Perhaps one or two of them might pop in…..

But for now, try…[Read more]

Thank you, gents.
With the extra help from you, I think I now “get” the whole picture. And, reading back, the first two replies said it all anyway – i.e. that even if you are paying IO currently, the initial borrowing was only granted because the lender deemed your total “free” income allowed you to make repayments even when you later change to…[Read more]

Thank you, gents.
With the extra help from you, I think I now “get” the whole picture. And, reading back, the first two replies said it all anyway – i.e. that even if you are paying IO currently, the initial borrowing was only granted because the lender deemed your total “free” income allowed you to make repayments even when you later change to…[Read more]

Thank you, gents.
With the extra help from you, I think I now “get” the whole picture. And, reading back, the first two replies said it all anyway – i.e. that even if you are paying IO currently, the initial borrowing was only granted because the lender deemed your total “free” income allowed you to make repayments even when you later change…[Read more]

Hi Terryw,
Well, I didn’t know the following – suddenly what you say makes sense.

Yes the cash flow consequences would be entirely different, but here we were discussing serviceability. The lenders will treat any IO loan as if it was a PI loan.

So, if a lender treats either loan similarly from a serviceability perspective, then that…[Read more]

Hi Terry,
I see what you mean, where a shorter term is increased to a longer one. But I think we are walking up different roads here nonetheless…. The point I was aiming at is that a PI loan REPAYS the total over a defined period. True? Now, if it 20 years, your repayments must be larger, or less if a longer term loan (30 years).

But…[Read more]

Hi Terry,
I see what you mean, where a shorter term is increased to a longer one. But I think we are walking up different roads here nonetheless…. The point I was aiming at is that a PI loan REPAYS the total over a defined period. True? Now, if it 20 years, your repayments must be larger, or less if a longer term loan (30 years).

But…[Read more]

Hi Terry,
I see what you mean, where a shorter term is increased to a longer one. But I think we are walking up different roads here nonetheless…. The point I was aiming at is that a PI loan REPAYS the toal over a defined period. True? Now, if it 20 years, your repayments must be larger, or less if a longer term loan (30 years).

But…[Read more]