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Again – it seems all I am doing lately is agreeing with Terry when I come on this forum but with Mebank withdrawing from certain niches the are really of zero interest to investors atm.
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This reply was modified 8 years, 7 months ago by
Don Nicolussi.
Don Nicolussi | Mortgage Broker - Home Loan Warehouse
http://homeloanwarehouse.com.au
Email Me | Phone Me"I think of finance as a technology, a way of getting things done." Robert Shiller
Benny – my vote was similar to today if the question is about the national average – nation median price. Looking forward to the next part of the cycle to be honest – a much better time for buyers.
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This reply was modified 8 years, 9 months ago by Don Nicolussi.
Don Nicolussi | Mortgage Broker - Home Loan Warehouse
http://homeloanwarehouse.com.au
Email Me | Phone Me"I think of finance as a technology, a way of getting things done." Robert Shiller
Is there any advantage to having equity when starting that I’m not seeing
Tiger, Well in short yes it really makes a massive difference. On the one hand the bank does look at your overall financial position. Assets and liabilities. The whole picture.
Sure high Loan to valuation ration LVR lending ( 95% investment loans ) is still available but having equity means that your finance broker will be able to structure a series of loans for you that do not involve LMI or lenders mortgage insurance.
* Some lenders use LVR to determine the rate they charge you – or the discount you can negotiate
* Yes your income will limit your borrowing but your equity will assist in helping you achieve a better loan structure, products and prices ( interest rates) and even fees. Your broker will be able to negotiate many aspects of what you end up paying. The stronger your position the better it is for you.-
This reply was modified 8 years, 9 months ago by Don Nicolussi.
Don Nicolussi | Mortgage Broker - Home Loan Warehouse
http://homeloanwarehouse.com.au
Email Me | Phone Me"I think of finance as a technology, a way of getting things done." Robert Shiller
Absolutely not! I would look for an aspirational suburb next to and similar in price to your so called “dodgy area”. Some areas are just not great. Find your dodgy area and then look at places where people who live there aspire to live in (realistic people).Price will be similar and yields will be the same if you work hard and finding the right property.
Lets face it some areas are in decline. They have problems that can’t be fixed. Avoid and avoid. Some area’s a set to change with concrete plans for change.
Long story short, your spreadsheet is going to tell you around 10% of why you should invest in an area.The other 90% will come from contact with actual human people and research. Dig and talk.
You will win if the area people think is dodgy turns out to be a “hidden gem”. The only trick is you have to trust your gut and do it before the herd.
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This reply was modified 8 years, 10 months ago by Don Nicolussi.
Don Nicolussi | Mortgage Broker - Home Loan Warehouse
http://homeloanwarehouse.com.au
Email Me | Phone Me"I think of finance as a technology, a way of getting things done." Robert Shiller
What to do if your valuation comes in low? I agree with the comments that in the majority of cases the bank assigned valuation result will be the same as the contract price. In fact, at loan to valuation ratios of 80% and in some cases 90% lenders will accept the contract price as the value and not require a formal valuation at all.
However, this comes with certain cavets such as property use, location and property type.
But what do you do if you are all ready to go and the bank valuation is low. First and foremost this is an issue that hopefully you have addressed before the purchase is unconditional. That is, your broker may have ordered and received the bank valuation for you prior to you committing to the purchase. This is available free with most lenders and for a small fee with others. However, if it is low you can a) form and argument about why it is wrong – some people will say this never work when it does work in strong cases but only if you have a very strong case or b) Simple go to another lender.
In all cases time is of the essence re valuations. You need time to dump and move on if you a result that is just plain out there.
Valuations are necessary to gain our finance but as investors it is important for us not to treat them as anymore than a tool for us to buy the property we need and to get out the equity we need to buy other property or in fact simply create liquidity pools that can be used as a rainy day reserve.
In niche areas of property investment valuations can be problematic. This is why you need to give yourself time and if using a broker give them the call early in the negotiation process to get your upfront valuation done. In rare cases real estate agents may stall access for various reasons in the early stages but usually getting your valuer through will not be an issue.
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This reply was modified 8 years, 10 months ago by Don Nicolussi.
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This reply was modified 8 years, 10 months ago by Don Nicolussi. Reason: having a lot of trouble on this keyboard
Don Nicolussi | Mortgage Broker - Home Loan Warehouse
http://homeloanwarehouse.com.au
Email Me | Phone Me"I think of finance as a technology, a way of getting things done." Robert Shiller
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This reply was modified 8 years, 7 months ago by
