Generally speaking, you times the credit card limit by 5 and that’s the amount of borrowing you’re foregoing. This is a VERY general rule.

When working out the monthly costs of a credit card, most banks times the limit by 3% so a $5k limit will equate to $150 per month in your liabilities.

Cheers

Jamie

Yep, I received the same spam PM as ceekay above.

Cheers

Jamie

goldies wrote:
Hi Jamie, I have my fingers crossed that I am onto a real winner later on down the trackFirst and foremost the cash flow is brilliant 14.8% after spending approx $12k on renovations for each house. ( we do it ourselves so don't pay labour costs) and its in a town experiencing good growth with rental yields having recently gone…[Read more]

The pricing discount on offer will also depend on your overall LVR and the current structure of your existing loans.The banks aren't as competitive as they were even a month ago. As has been mentioned a heap of times in the past – it's not always about rate. There's so much more to consider.CheersJamie

Hi GoldiesThe major pro is probably the cashflow – I'd imagine the yield would be quite good if the purchase price is comparable to one property.If you could sub-divide later on, then it's an extremely good find!The major con is what you've alluded to – there will be a limited scope of interested buyers in the future. CheersJamie

Hi MarcusCongrats on your first IP.Personally, I'd look to use a broker independent of the selling agent.ME aren't the most competitive lender out there – from memory, their offset product is a tad on the expensive side.There's a few decent brokers on this forum that could help.CheersJamie

The lease that they signed will still apply.CheersJamie

tigermiger wrote:
Our mortgage broker has advised that the IP loan must be in joint names as we do not have sufficient funds to borrow in one name only & that our PPOR will be used as security as we do not have enough funds.

Does your mortgage broker own investment properties? Does he/she usually deal with investors?They have crossed up your…[Read more]

I hope you haven't paid down a huge chunk off that current PPOR principle.CheersJamie

No worries.Best to get rid of those credit cards and car debt first.Then set up an offset against your IP.Any spare savings can be placed in that.If you decide to purchase another PPOR in the future – move the funds from your IP offset onto your new PPOR.CheersJamie

Hi Shiny Suit ManDo you have an owner occupied property with a loan or any consumer debt such as personal loans, car loans or credit cards? If so, pay these off before you set-up an offset against your investment property.CheersJamie

If it sounds to good to be true it often is.If the property is genuinely worth $600k plus then there's no reason why it would sell for half of its value. I'm sure the REA would have a long list of contacts interested in this property if that was the case.With auctions – you need to exchange on the day and go through with the purchase. Therefore,…[Read more]

There was one lender that was particularly good with this – but they've since revised their policy (which is a bit of a shame) so it doesn't work quite as well.CheersJamie

Hi Shiny suit man (nice name)An offset account is basically a savings account which is linked to your home loan.Instead of placing money in a normal savings account which will provide you with interest. You place money in your offset and it reduces the interest repayment on your home loan. In example, if you had a $10 home loan and placed $2 in…[Read more]

It can sometimes enhance your borrowing capacity but as Richard said – it doesn't help with getting LMI approval.CheersJamie

Hi WilkoWelcome to the forum.Is property a good investment? I think you'll receive an overwhelming response of "yes" on a pro property investing website.Starting off in your early 20's is ideal for property. As you've alluded to – it's a longer term investment so starting out early enables you to potentially enjoy a longer period of capital…[Read more]

Jamie wrote:
effectively reducing your deductible debt whilst

Sorry should have read "non-deductible debt" Cheers Jamie

Hi MatI'd be inclined to set it up as interest only with an offset. Instead of paying down the principle – place your spare savings into the offset. This way, if you buy a PPOR in the future, you can move your funds from the offset onto your PPOR – effectively reducing your deductible debt whilst increasing your deductible debt.I wrote a blog…[Read more]

Hi thereIt's not so much the ANZ costs (unless LMI is payable again).You'll need to get a payout figure from CBA so you can make an informed decision.There's also some govt fees (not huge – but worth noting).You also need to look at the opportunity cost of not switching. I assume the equity was going to be used to fund another IP?CheersJamie

Sounds great – I'll be there.CheersJamie