Forum Replies Created
Agree with Richard. CBA's is quite a pain to operate.
That being said, there is some value is 'separating' the extra repayments.
RT,
Reading your response, one could be forgiven for inferring that you are predicting that interest rates will rise…?
HP
Here's a nice forecast of where the banks are expecting rates to go. Enjoy!
- St. George – "We expect further rate cuts and look for the official cash rate to be at least as low as 2.50% by the end of this year."
- ANZ – "The RBA has undertaken aggressive rate cuts in recent months as part of the global response to the financial crisis and ensuing economic downturn. Markets expect this process to be extended even further in coming months with official cash rates now expected to head towards 2.00% by mid 2009 compared to a peak of 7.25% in late August."
- CBA – The CBA quarterly forecasts are as follows; Mar 09 3.25%, June 09 2.75%, Sept 09 2.75%, Dec 09 2.75%.
- Westpac – "The bulk of the easing (probably around 80%) has already been achieved with the principle of preemptiveness being firmly and appropriately embraced. However we now assess that there are probably only another 125bp's to go." This would mean a cash rate of 2.00%.
- nab – "Our call has been 50-75 bps; it’s now looking more like 25-50bps, with 50 bps possible if the RBA thinks that they won’t get a further reduction in mortgage rates without cutting the cash rate by 50 bps." Nab made a short term prediction just for today's announcement of 3.00% or possibly 2.75% (unfortunately they were wrong).
With some banks you might find that they have an "open policy" with their mortgage insurer, meaning they have something akin to a "discretionary sign off" ie they they sign the deal off in house, rather than sending it to their mortgage insurer.
If that's the case, it's business as usual and there won't be any postcode restrictions.
EV,
You're almost there. Instead of putting it into the redraw (ie the loan), you should be putting it into the offset, which I believe is called the mortgage interest saver account.
It's when you redraw the cash from the loan where you may have potential issues, as you want to preserve tax deductibility, particularly as under the wealth package the offset account comes for free.
Same effect better structure.
hp
I don't believe so if it's a spouse. Check with a lawyer but I do think that the 50% share can be done through "love and affection"
Rumour has it though that RBA are gonna cut rates again in March… don't base your decisions on what I hear on the rumour mill though!
Bottom line that I think Joyce wants the answer to – you WILL be able to refinance through St George for the 1.5% discount!!!
The original answer still remains that both names still need to be on the loan…
All Title owner must be attached to any Mortgage on that property in some way, so whilst one person can technically be on the loan, the other will still need to be a guarantor. So Mrs can be the borrower & Mr be the Guarantor.
This is to avoid one party taking out a Mortgage Loan over a property without the consent of the other owner/s.
The Bank would usually want a good reason to do it & it is usually done when purchasing Investment properties, for tax reasons. Servicing will be calculated using borrowers income only & guarantor is also expected to have clean CRAA report.
If you needed to have an operation done, would you go and see a doctor who rebated 50% of his fees? Now if you wouldn't do that for a doctor, why would you do it for your mortgage?
A 50% rebate would be something like $500, however we have seen clients AFTER they have been to outfits like these with a pre-approval in hand, and we were able to restructure the loans which saved the clients thousands per year.
Whilst we don't charge a fee for our service, you will be surprised at how many of our clients offer to pay – if that is the case we put the money to good use and donate that to charity.
Joyce,
Now that I have a clearer understanding of your situation, if you are able to demonstrate that you can service the loan all on your own, and you husband is without tax returns, all you would need would be a letter from his accountant saying he does not have any further business debts etc. It's really a question of understanding the lender's policies in this regard.
What area are you based in?
Best regards,
Hany
Joyce,
Now that I have a clearer understanding of your situation, if you are able to demonstrate that you can service the loan all on your own, and you husband is without tax returns, all you would need would be a letter from his accountant saying he does not have any further business debts etc. It's really a question of understanding the lender's policies in this regard.
What area are you based in?
Best regards,
Hany
The key thing behind St George's 100% product is you need to show that you are able to periodically save half of the monthly repayments over a period of 3 months.
ie if your repayments are $1500 per month, they need evidence of you contributing at least $750 in some form of regular payment that will cease (ie rent over the course of 3 months, personal loans that will be cleared, etc)
That is where most people get tripped up.
Hi Joyce,
I am pretty sure your lender will have an issue with it – if your name is on the title it must be on the loan. However, you can be on the loan without being on the title, just not the other way around.
The only other way would be for your husband to "gift" his share of the property to you, eliminating the need to pay any stamp duty. Then you can refinance. You'd have to do the whole thing all at the same time.
Cheers.
Hey clones,
For clarity:
Deal 1 – one of the more memorable ones: the auction was at the real estate agent's office 3 days before the actual auction and the agent had a "written bid" of $330,000. This was on a Wednesday at 5pm; god knows why the agent held the auction at that time. There were 2 bidders and the agent sat us both in different rooms and walked around with a clipboard from room to room so we couldn't see each other or "intimidate" each other. The other bidder did not have faith in the entire process and walked out. We were therefore the only bidder left, incredulously, the agent said make an offer over $330,000 and it's yours. My whole body was trembling and I almost had the gumption to offer $330,001 but as a good faith gesture went to $331,000.
I will happily pay full asking price for something so drastically undervalued. Now why would I want to sell it and pay capital gains tax when I was able to leverage it and get another $150,000 out of the bank???
Deal 2 – You will be surprised at how much a coin laundry can make. Think average customer = 2 machine washes x $3 or 1 large machine wash of $7 and average tumble drying of $3 and you will have a profit of about $10 less outgoings of water and electricity. Some of my customers come every day to do their washing, and there are some regular faces who will bring car loads of clothes to the laundrette as part of their "washing clothes" service business and wash THEIR customers clothes (ie I pay you $20 to wash my clothes and you only spend $10 at my laundry = profit of $10.)
Deal 3 – One thing about Footscray is the State Government is pumping in $50 million to rejuvenate the whole area and remodel the station. Part of this process is to demolish the station and older looking shops I believe to add another platform. All the traders who have businesses along the station side are being paid out compensation for the compulsory acquisition of their business/property. This property in question is across the road from the station. Initially, this was a risky deal given the vacancy, but obviously proves the value of calculating the risks and doing your research.
Finally, we do not operate a real estate business; we are a finance broking company based in Footscray. If you're ever in the area I'll happily give you a guided tour.
Braybrook/Maidstone has been given a fairly bad rep for crime etc in recent times, but I would suggest it would depend on whether you are north or south of Ballarat Rd
Of the two I would prefer Maidstone (north of Ballarat Rd) given the closer proximity to Highpoint and Maribyrnong.
There is a lot of new development going on in the area, for instance on Barkly St, West Footscray you have Bansbury Village being developed by Cedar Woods, and on Hampstead Rd Maidstone you have Willow Park developed by JMC and also an AV Jennings development.
If interested in any of these an old university mate of mine is the development manager at Cedar Woods and I have relationships with the other developers too if you want to go direct rather than through an agent.
Hey Clareow,
You will be up for some pretty hefty mortgage insurance (upwards of $10k) on that size of the loan. But there's no reason why you can't get the best of both worlds – it seems what you need is a lender who will provide you with cheaper mortgage insurance, an offset account and will still offer you a low interest rate.
Alternatively, some lenders will allow you to directly credit your salary into your loan and give you the ability to freely redraw upon that if and when you need it, which sort of acts as a quasi-offset, but then there are serious tax issues that would need to be considered in doing this if you decide to only live in it for a while.
Hi Hari,
I am a huge fan of Footscray/West Footscray having purchased 7 properties in the area.
Current median sales price in the area is $477,500.
In 2007 prices grew by 22.6% and in 2008 prices appreciated 10% so there has been a lot of growth recently.
Also, 50% of all households in Footscray are renters so it's pretty good for investors.
I know a lot of agents in the area too if you are interested in any introductions! Any more questions don't hesitate to contact me.
Up until about a year ago there was a lot of private financing and even solicitor funding available. Banks may only lend to about 70% LVR and even then if you are developing, some banks will not release funds until the subdivision is through. Furthermore, development financing is driven largely by pre-sales, which might not always be possible.
A developer may typically finance with a commercial bill, where the interest capitalises and is rolled over at the expiry of each term. Essentially the bank will reassess the situation when the time comes to rollover the debt and if they feel uncomfortable with it because of some material adverse effect or change in circumstances, they could call in the whole debt.Now you could be in the middle of a development when this happens to you, and then you only need a couple of hundred grand to tide you over and finish off the development – so what would you do? Pay an interest rate of 15% or more to finish the development and at least have the chance of making a profit, or be forced to sell the incomplete asset in a fire sale and have all your hard work go up in smoke?
So rather than jump through all the banks hoops, some developers would prefer to just get the cash, and knock up the development in double quick time. Then they can flog it off as quick as possible, or hold onto them to enjoy an income stream sooner.
That being said, it is pretty hard even to get private client financing these days, particularly for developers.
The premises should normally be restored to the condition that they were in when the lease was originally entered into, with the exception of fair wear and tear.
If it costs them more to remove it than the stuff is worth, it sounds like they just want to get something (anything!) for it, but they agreed to the make good clause when they signed the lease, and you have every right to enforce it.
You can tell them they can remove the stuff if they like, or they can leave it if they like, but you are not going to pay for it. However, IF they DO remove it, then they will need to patch up any damage that they cause in the removal process.
At the end of the day, the tenant in this situation is clearly in a much weaker bargaining position, so in a sense, it just depends on how nice you want to be. If they were good tenants, then perhaps you should give them something fair as a good faith gesture, particularly if you have other properties for them to rent.
If not, then I guess it's not personal…
