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You won’t have much like getting an Australian lender to take security over that property. Are you able to use a local bank in Holland to draw the equity, then direct the funds to Australia for the future purchase?
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
LVR is more of a factor for desktop vals than loan amount/property value. Desktops can be quite favourable, but there are quite a few times where they come below fair value. Most lenders have processes in place however to upgrade these vals to drive bys/full vals if the broker requests.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Renting whilst investing can in many cases be more cost effective, though there are a few markets where it is still more affordable to buy than rent of course.
There is the personal/emotional factor of course, whether you like owning the four walls around you, or are happy to rent whilst investing the difference.
Renting the duplex in it’s entirety would of course provide significant depreciation benefits early on too.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Not a problem Charlies, I’ll let the organiser to put down a +1 for you.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Hi Charles,
The next meetup is on the 30th at this stage. Info here: http://somersoft.com/forums/showpost.php?p=1178245&postcount=220
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Hi Charles.
The Adelaide meetup group generally meets towards the end of the month, on a Monday evening. It’s on the Somersoft forum:
http://somersoft.com/forums/showthread.php?t=84714&page=11
Last meetup had investors from SA, WA and NSW all come down.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
No, thankfully you will only need to show that you have saved over 3 months with the end balance being 5%. :) For example in your hypothetical purchase of 330k you would need to show a bank statement showing an increasing/steady bank balance with an end balance of 16.5k. In reality you would need to show a higher balance of course for funds to complete – so you can cover stamp duty/other govt charges.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Hey Magic,
You’ll only need to show 5% genuine savings via a three month transaction statement within LMI territory for most lenders, some won’t require this sub 90%.
Changing employers also won’t be a huge problem if its a permanent role. if you have a probationary period most lenders will want to see you off it first.
Lenders will take into account a 100k gift from parents, they will generally want to see it in account with a signed dec from parents stating that the funds were a gift.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Peter Tersteeg at Sage Lending solutions 1300 880 225
http://www.sagelending.com.au/
In saying that, in this day and age you can use a broker anywhere in the country as most work is done via phone + email. In saying that, I can appreciate the value of being able to sit down in front of a broker. :)
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
They should be able to provide information regarding why the build val has come so far below, especially with regards to price per sqm. Request info regarding this and find comparables to reflect the val your friend needs.
Everything else is just static, it’s unfortunate that it’s happened – time to resolve things now.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Do you have a signed contract with both builders that costs would be 50%?
Generally I’ve known the higher side property to foot the entire retaining bill.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Just a cash grab. The same services are being provided to owner occupied and tenanted investments, so rates shouldn’t change.
It would be different if this was a private sector service, but this is a local government charge. You should not be slugged more for a service without adequate justification – which does not include ‘they can afford it’.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
I wouldn’t say it’s necessarily a case of breaching duty of care, but a bit of poor forethought on the brokers side perhaps.
There are plenty of reasons why a person would source finance for a vacant block of land, I wouldn’t expect a bank to refuse finance based on potential issues moving forward for construction.
If the block value has gone up 20k and the lender is still requesting a further 40k, something doesn’t stack up. I’d take the guess that due to the limit current stock available of that type, they are having difficulty finding comparables. Are the $ per sqm meeting market averages?
It might be of value requesting a *new* valuation from the lender, particularly if you can find comparables which support the market value – these need to be sale prices however.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Market economy, as DT has mentioned – if there is the potential to open an agency running on lower margins as their point of difference, it will most certainly emerge. Some of the business administration costs in WA are quite high.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Lower of the two values as per norm.
Which lender is this? If you have to go back to assessment, quite a few lenders will be able to run this through the processes relatively quickly, unless you’re with one of the snailbased banks. :)
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Not the best situation!
Generally it’s adviseable to put the land + construction finance in at the same time, to avoid these issues – though usually it’s the land coming under, as opposed to the build. The 2yr fix is going to act as a further anchor.
Did he pay LMI? If he settled on the land recently and his fixed rate reflects the current ADL bank rates available, he *may* be able to exit his fixed rate without cost, refinance to an alternative lender who will accept the H&L value.
If he can’t break the fix without substantial cost, has already paid significant LMI or a combination of the two, he’s in between a rock and a hard place.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Agreed completely with Terry. There is almost no practical benefit to x-coll, so it’s best to have this sorted out sooner rather than later.
It may seem daunting, but a decent broker can unravel the mess if they know what they’re doing. :)
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Thankfully Homeside have a decent upfront valuation process.
Homeside for an initial lender isn’t ideal, as they are generally best suited for mid term, end term investments where serviceability is drying up amongst the conservative-mid range lenders. The second property might be a good chance to diversify into a more appropriate lender if you’re looking at growing a reasonable size portfolio.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
The above applies then. If you do need to draw on equity for the purchase deposit funds, have this setup as a separate split so the deductible/non deductible funds are clearly defined.
And the usual advice to avoid having the two properties cross collateralised.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
I wouldn’t pay the apartment down any further. Instead place these funds in an offset account to be used as deposit funds for the townhouse. I assume otherwise the full deposit amount will be drawn from equity, meaning you have a minimal deductible debt and maximised non deductible debt – not ideal.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
