[investToSurfParticipant@investtosurfJoin Date: 2005Post Count: 21]

March 20, 2013 - 6:18 am

So this would only need to be for the 40%? 

[investToSurfParticipant@investtosurfJoin Date: 2005Post Count: 21]

March 20, 2013 - 5:55 am

Thanks for that Nigel. The issue I have is securing the 40% for the deposit against the properties I have in australia. I havn't asked the my bank but Im assuming they won't lend it to me without the details of the property in the US. 

I'm assuming that the banks you are talking about are US based banks? Can we deal directly with them? ie can they use the equity in my australian property as the deposit (40%) and then borrow against the US house the remainder 60%?

Cheers. 

[investToSurfParticipant@investtosurfJoin Date: 2005Post Count: 21]

March 20, 2013 - 3:09 am

Hi Nigel and Rob,

Just a couple of questions as to how the nuts and bolts of securing a us property. How does it differ from securing a loan in Australia. ie;

find property.

organised through broker or bank loan based on;

– value of property,

– expected rental yield,

– equity borrower already has and any cash funds and

– finally current income and loans that borrower already has.

Does having equity in Australian property allow us to secure and purchase property in the US? Do we need to have established a loan here in Australia first or simply just have the cash?

Thanks in advance,

Invest2Surf

[investToSurfParticipant@investtosurfJoin Date: 2005Post Count: 21]

May 4, 2012 - 12:37 am

Hi Mattsa,

I’ve heard that you can spend up to 10% of the total value of the property on the landscaping without over capitalising.

Cheers.

[investToSurfParticipant@investtosurfJoin Date: 2005Post Count: 21]

July 16, 2010 - 4:27 am

Hi,

We have a holiday house and have it posted on stayz.com.au and takeabreak.com.au. both these sites have high visits and they take about 8% of bookings through the sites (so you can still have your own bookings). ohh they also have a yearly fee of about $100 (my wife does all the fine details).  IMHO well worth it!

Cheers,

Invest2surf

[investToSurfParticipant@investtosurfJoin Date: 2005Post Count: 21]

October 28, 2009 - 1:10 am

I guess there doesn't seem like a good reason not too, and on top of all the other reasons, they can have the loan set up within a week as opposed to 3-4 with the big bank. This is very good as settlement is once finace is sorted.

Thanks for your comments guys, I guess if a loan broker is suggesting going with a non bank that it must be a good idea

[investToSurfParticipant@investtosurfJoin Date: 2005Post Count: 21]

October 27, 2009 - 11:59 pm

Banks only insure loans above 80% LVR. Below this and you are free of LMI restrictions.

>>so non banks will pay LMI regardless? how do they charge me for it? is this factored into the interest rate or are they going to hit me with it some other way?

If you think your rates will just go up in line with the RBA just ask Macquarie Mortgages clients how they feel about this!

>> yes I know when the credit markets froze last year and the banks were dropping rates to compensate some lenders didn't pass on this. but don't you think credit markets are less volitle now and therfore this risk is lower?

I wouldn't think security is a reason to go to big banks, but the other reasons I listed are.

>> can you refresh me again? LMI, and lack of offset?

You also misunderstand offset accounts. The balance or wouldn't change on a IO loan with an offset, just the monthly repayments would be reduced.

>> OK i'm with you. I had a loan with set monthly repayments so the offset paid down the principle. If i've got extra money I want this to work against my home loan not the investment though.

If you don't intend to invest, never intend to move or increase your loans, then you may be right with the smaller non-bank funder – subject to the problems above.

>> I do intend to invest and increase and change the loan. The features like free valuations, free increasing the loan, portability, will allow me todo this. My experience with banks so far is that I've had to pay when these things have had to happen in the past. The package that my broker offered now these are free too, but you pay a $300 a year fee though.

>> I will be saving about $1700 a year with the non-bank, I think that worth it not having the account bells and whistles that I'm not going to use.

[investToSurfParticipant@investtosurfJoin Date: 2005Post Count: 21]

October 27, 2009 - 11:27 pm

Hi Richard and Terry, I'll squeeze a response to both of you in one to make it easier. I've cut parts of your responses into and put my responses against these.

 

If there is LMI involved then the LMI company will dictate the requirements you will have to meet. So if in the future you apply for a increase and your postcode is no longer allowed with then you won't be able to increase the loan. Or your employment may change casual and they won't allow it etc etc.

>> ok I see your point. but wouldn't this be a problem with a bank as well?

Also there is only 2 major LMI companies, so giving your detail to one will mean if you go to finance at another lender, or a bank and borrow more than 80%, than that lender's LMI people may know your info already. This is not good if you have already been rejected (or if you have told them different info!).

>> I don't see this as a problem for me.

Also – ask them their fixed rates. They will probably be much higher than a bank. So if you suddenly decide rates are going up and you want to fix……..

>> they currently offer, 3 year fixed for 6.99%. this seems competitive.

What happens if they were to sell their loans to another lender? Sudden increases?
Customer service after a few years?

>> Aren't I locked into the variable rate, so my rate will only increase if they increase the variable rate on everyone, including the new clients. this would mean that they loose their market edge of a low variable rate and not win more customers. what I'm saying is, isn't it in their best interest to keep it as low as possible?

Lack of offset is a real problem too. Without one you will be paying down loans which may not be good for tax later on.

>> I thought that having money in an offset against an interest only investment loan then means that it will start to pay the principle off and therefore not be tax effective. Because I can have unlimited deposits and redraws (with no minimum) I plan on putting any excess 'offset' money into my personal home loan and leave the investment loans as is (just pay them fortnightly/monthly) from the home loan account.

Problem is you cant go the 4 or 5th mortgage insurer once you have max out with another because there are only 2 of them out there. Unlike lenders where you can switch around and try another lender.

>>

As Terry mentioned it is horses for courses but i wouldnt touch a lender like them. 
Guess i can think of all the securitised players who are no longer with us. Promised the world yet didnt last the distance.

Reminds me of a few horses i have had a quid or two on.

If they were that good why dont they have a bigger market share.

>> I guess its like Steve says "success comes from doing things different from others". I've been asking lots of other people over the last few weeks about who they use and why. Like you said many are with a big bank, but the only feasible asnwer is that their loan broker directed that way or for the security of a big bank.

>> my belief is that if they haven't fallen yet then they are most likely a stayer. We;ve seen that anyone is fallible, even some of the biggest banks in the world that were 'too big to fail" have fallen. Also, excuse me here, brokers have a vested interest in going with the places that will give them the best cut. After all this is their livelihood, this is how you feed your kids (and buy the 4WD's . I may be proved wrong in the coming years but right now the risk is 1 months repayments, and if they are what they advertise they are then I'll be happy.

 

 

[investToSurfParticipant@investtosurfJoin Date: 2005Post Count: 21]

October 27, 2009 - 9:34 pm

Hi Richard,

I'm not following. So even with LVR less than 80% the insurance is paid by the lender (therfore they have accounted for in the in the interest rate?) I take to mean that LMI is paid all the time then?

If the LVR is greater than 80% the the borrower pays, if under the lender pays?

why is Insurance a bad thing if the lender pays for it?

Cheers,

2surf

[investToSurfParticipant@investtosurfJoin Date: 2005Post Count: 21]

October 27, 2009 - 11:11 am

Hi Terry, thanks for your post. I spoke with the lender a couple of times and he got me to put my worries down in email, this is what he wrote back.

Interest Rate: 5.06% standard variable
Free Application
Free Valuation
Free Settlement Fee
No Monthly or Annual Fees
No Ongoing Fees
Free Internet Redraw
Free Salary Crediting
Free Online Banking
Unlimited extra repayments allowed
Repayments: Monthly, Fortnightly or Weekly
Exit Fee: 1 months payment in the first 5 years only
The loan is portable if you sell
No mortgage insurance for loans under 80%.
You can increase the loan at anytime

in response to your questions;
1. There is no guaranteie they will remain low. (neither are the banks) –

this is the risk but like you said the risk is the same with big banks. They told me that they source their money through NAB so will be inline with their movements.

2. usually high exit fees.

– its one months repayment. this is higher than big banks
and the main one
3. LMI is applied to the whole loan which could limit you in the future
and

What do you mean by this?? does LMI = lenders Mortgage Insurance ?

4. difficulties dealing with them in the future

5. difficulties in trying to get an increase etc

I also spoke with my broker (who is in top 100 in country) and he said that he can't match it and if I was happy with risk of going with a non-bank lender then do it.

Any more input anyone?

Cheers again,

invest2surf.

[investToSurfParticipant@investtosurfJoin Date: 2005Post Count: 21]

September 30, 2005 - 1:59 am

G’day all,
I’m in a similar boat to julie and thomas as a real estate agent friend has sugested that i should be able to sell the front one for the same as what i paid (not including buying and selling cost though) anywho I’ve got the land for free to build my new family home

KP I’m not sure if i understand your method, is there some way to declare the new subdivided land below market price?

[investToSurfParticipant@investtosurfJoin Date: 2005Post Count: 21]

August 23, 2005 - 1:00 am

Thanks Gross, do you want my email address to send the spreadsheet? ( i think you can find it on my profile)?
I like Adelaide too, there is much going for it except population. I have a few theries on where its going but generally the market has slowed here but definately not gone backwards.
what do you mean by “do finace”? Is that providing finace for others investments?

Cheers.

[investToSurfParticipant@investtosurfJoin Date: 2005Post Count: 21]

August 22, 2005 - 11:39 pm

Hi Gross,
Unfortunately I’m in Adelaide. I would have really liked to come to a get together like that. I might see what I can get from bank web sites and, like AUSPROP said, make a simple spreadsheet that I can plug the numbers into.
Thanks again for your posts.

[investToSurfParticipant@investtosurfJoin Date: 2005Post Count: 21]

August 19, 2005 - 6:50 am

woops ignor this, I didn’t realise that the forum’s spanned multiple pages, I thought my original question on the programmes didn’t go through. Trap for young players!

[investToSurfParticipant@investtosurfJoin Date: 2005Post Count: 21]

August 19, 2005 - 6:28 am

Thanks Gross, yeah all those things really eat away at your profits. buying = 16K selling @ 5% = 31K. What programmes do you use to get the figures or can you recommend any?

What about TAX? or is this a whole new thread?

[investToSurfParticipant@investtosurfJoin Date: 2005Post Count: 21]

August 17, 2005 - 11:55 pm

thanks Gross,
Are these programmes ones that you have purchased or self devised?

what about taxes?

[investToSurfParticipant@investtosurfJoin Date: 2005Post Count: 21]

August 17, 2005 - 11:45 am

g’Day Gross,
my broker said that to only cost 5K per year to hold 600K approx worth of property was damn good. I guess that he has seen too many negative gearing deals:) although that was to buy and hold, Im leaning more to selling them now.

I feel like i have broken many rules that steve has said in his book, so i’ll be happy to come away from things with my head above water and of course the lessons learnt.

I’m curious as to how you came to the 19%. I stated the costs as 440K and selling price at 620k what else should i factor in???

[investToSurfParticipant@investtosurfJoin Date: 2005Post Count: 21]

August 17, 2005 - 3:20 am

Hi all, I’m a virgin poster and just read this thread and sounds like i could be half way through an investment that might not stack up. I’ve listed the details below and can provide more if needed. In a nutshell, I’ve just bough a big block 900sqm with a 3 br house on the front, community title hammerhead devision (small costs), 3br, double carport 141sqm house on the back.

Cost of land 280k + 15K in buying costs
Build Cost 130k + 15K landscaping of both
renovate on existing = 10K
Value on completion 270K front
350K on back = 620K
Int rate 6.8%
To Build 12 months
current retun of $8800 from existing house’s tennents.

Inially I wanted to buy and hold but after reading steves book and some posts I’m not so sure.

My loan broker and i have done the sums and, with tax benefits, it’ll cost 5K to hold each year

Grossrealiastion, it sounds like your the man, can you work these figures?