Forum Replies Created
@zen by all means please go but dont proceed haha!
At the very least dont use their broker as they will cross the property with your PPOR and hide the 40k commission in that and you will likely never know! Other broker will do it as well so use an investment broker who knows how to structure debt to your benefit and not the banks or spruikers.
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This reply was modified 7 years, 8 months ago by
Colin Rice.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
@deancollins – I would look for a 2 or 3 year fixed rate as 5 years is a long time and a lot can happen that could trigger a sale of a property therefore incurring break-costs that could be substantial.
I see the short to medium landscape for interest rates continue to trend downwards, perhaps all the way to a zero cash rate and if correct fixed rates will continue to drop as well.
As always this is just an opinion so make your own mind up :)
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This reply was modified 7 years, 8 months ago by Colin Rice.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
@FXD looks like you may have capped out, which is becoming more common.
Pre APRA it was rare occurance that a deal could not be placed, now its a once a week event.
Did they try Liberty or FirstMac as they are one of the few lenders left that will do other banks debt at actual repayments and only buffer debt with them?
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This reply was modified 7 years, 9 months ago by Colin Rice.
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This reply was modified 7 years, 9 months ago by Colin Rice.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
Anyway, the actual situation when I said no more borrowing I mean I have heaps of equity but lender will not extend/increase existing
LOC limit or let me have an additional new LOC/loan facility. The reason is simply that no servicing power left.Do you have all your lending with one bank?
Did the brokers you approached check other banks as servicing varies between banks and depending on your scenario and what you want to achieve there may be other options but hard to say without knowing the full picture???
However, I suspec that if I use the existing LOC as 10% deposit for the next purchase which will return a rent income, the lender may be
willing to let me access equity in existing properties say another 10% to 20%, while the new property itself will secure a new investment
loan and also brings in rental income.Rental income can be used to increase servicing but the corresponding debt has to be considered as well, both with existing bank and new bank for remaining 90%.
Sounds to me like you may have all your eggs (loans) with the same. Whilst ok for a 2 or 3 properties going beyond this will present certain risk you would need to mitigate. Also would need to look at uncrossing securities if they are crossed but may or may not be possible depending on serviceability and which bank/s you are currently with.
I would suggest you get a third opinion via a pre-limanary assessment form a competent broker experienced in investment finance structuring.
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This reply was modified 7 years, 9 months ago by Colin Rice.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
Does going to MB across different states improves one’s borrowing capacity instead of just stick with the same state due to convenience
and accessibility reason?If you use a WA Broker you will always be better off ;)
Just joking, it makes no difference as the criteria / process is universal when assessing an application.
Like any profession there are varying levels of competency and experience so the brokers you have spoken to could have missed something due to a few factors so no harm in getting a third opinion.
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This reply was modified 7 years, 9 months ago by Colin Rice.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
You can still borrowing 95%+LMI, however you have to ask yourself whether its worth it.
Some people do no have a choice and are happy to go to 95% + cap on an IP whilst others wont go above 80% so depends on your risk profile.
Corey is correct though, 88% is the sweet spot between leverage and LMI premiums.
Also helps with some banks auto credit scoring methods as it keeps the whole deal sub 90% which is considered less risk by the lender than +90% LVRs.
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This reply was modified 7 years, 9 months ago by Colin Rice.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
why would you need a trust? if you are an Australian citizen you can buy property in your own name.
Depends on the property, is it negatively, neutral or positively geared? Bought in an individual name (trustee) or multiple purchasers. Selling or holding?
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This reply was modified 7 years, 9 months ago by Colin Rice.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
Many banks talk to people of Redraw, and “Yes, no problems, you can just borrow the money back again if you need it!”
I have had clients tell me that bank staff have told them that redraw and offset are the same thing. They clearly serve different purposes but if you have no understanding of tax law you may think otherwise!
An option to consider is go interest only with a linked offset. Make interest only payments (from this same offset) and store the principal plus any savings in the offset account. Having salary’s and rent from IPs paid into the offset is beneficial in most cases as well as it will potentially offset non deductible debt.
This way you preserve the principal loan amount at 100% of its original value, so if you do rent out in the future you get max deductions, yet still receive the same net benefits as if you where paying down the loan due to funds in linked offset.
Its a great way to “hedge your bets” because if you never rent it out then you have bulk cash in the offset (you become the bank so to speak) with the ultimate aim of having the same amount in offset as the original principal amount.
Disclaimer: the above only works well if you are disciplined with finances and dont just spend money because its in the bank. Also, new responsible lending guidelines need to be observed so a P&I on a PPOR loan may be applicable in some circumstances as well.
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This reply was modified 7 years, 9 months ago by Colin Rice.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
Maybe he is, maybe he is wrong, again!
A mitigant / strategy is to find quality stock that you can add value to and there fore create equity and as long as a tenant is in place and the rents are cash flow neutral to positive and I have cash buffers in place for the unpredictable then I am at peace to keep building, no pun intended :)
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This reply was modified 7 years, 9 months ago by Colin Rice.
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This reply was modified 7 years, 9 months ago by Colin Rice.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
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This reply was modified 7 years, 8 months ago by
