Forum Replies Created
Dear Josh,
To purchase properties you need to be able to demonstrate to the lenders that you can service the loan (naturally). To do this you have to show them that you have enough income after expenses. You therefore need to try to increase your income and reduce your expenses – here are a few ideas:
1. Purchase cash flow positive properties, properties that generate more in rental income than they costs you in terms of expenses (mortgage repayments, agents fees etc).
2. Consult with a mortgage broker to ensure that you have the most compeitive mortgage for your situation
3. Consider simply repaying the interest only on your existing mortgage for a period
Be mindful about changing jobs at this time to increase your income. Lenders do like you to have been employed (or self employed) for a period of time. Again a broker can help you work out how long.
Hope this helps and good luck.
Regards
Neil and Kate Gorman
Mortgage Broker
Mortgage Choice – there’s only one choice
tel: 0430 500 848
e-mail: [email protected]Dear RPBROWN,
The answer is that it depends on which lender you speak to and what type of work you do (full time, contract, casual, self employed etc etc).
Assuming you work full time, most would ‘prefer’ for you to have been working for 2 years plus for the same employer, however many will accept 6 months, and some even 3 (partly dependant on what you were doing before).
For this reason I’d advise you find a broker so they can do the ‘legwork for you.
I hope this is of assistance,
RegardsNeil and Kate Gorman
Mortgage Broker
Mortgage Choice – there’s only one choice
tel: 0430 500 848
e-mail: [email protected]Dear Julie,
Just did a little bit of research for you, just looking at the major lenders at this stage.
Reference casual employment most say 12 months, however Westpac suggested:
12 months current Employment, however will accept minimum of 3 months (not on probation), if working in same or simular indutry in previous 12 months
So there are options out there.
Hope this is of help,
RegardsNeil and Kate Gorman
Mortgage Broker
Mortgage Choice – there’s only one choice
tel: 0430 500 848
e-mail: [email protected]Dear Andrea,
As has been said, you can get 100% loans for investment properties. This implies that you do not need a deposit but as Bridge says you would still need monies for the closing costs:
Property Stamp Duty
Possibly Loan Stamp Duty
Your Legal Costs
Lender’s application fees
Plus the fees for a deposit bond if you used one.You could as you’ve suggested use the equity in your own property as security for the investment property as you’ve suggested. Many people do. However, if for any reason you defaulted on the investment property, and the lender forced its sale, if they could not recover their costs they could come after your own property.
Another option would be to take out a Line of Credit on your existing property. You ask your lender to provide you with more credit than you need to cover the mortgage on your existing property. You then use this credit, which naturally you’d need to make repayments on as the deposit for the investment property. Thereby keeping the 2 properties seperate. However, Line of Credits often come with higher interest rates.
A lender/ mortgage broker should be able to provide further advice.
Good luck
Neil and Kate Gorman
Mortgage Broker
Mortgage Choice – there’s only one choice
tel: 0430 500 848
e-mail: [email protected]I think you’ll find that an equity home loan and and equity line of credit are the same thing, just called different names by different people.
Neil and Kate Gorman
Mortgage Broker
Mortgage Choice – there’s only one choice
tel: 0430 500 848
e-mail: [email protected]Apart from the fact that the LoC gives you access to just that credit, which you could use as a deposit for another property or to pay for renovations etc.
Neil and Kate Gorman
Mortgage Broker
Mortgage Choice – there’s only one choice
tel: 0430 500 848
e-mail: [email protected]Be aware though, that though you can get 100% loans for investment properties as Terry says, whether you get an 100% loan for an investment property or owner occupier, you still need enough $$$ to pay for:
Property Stamp Duty
Possibly Loan Stamp Duty
Lender’s Mortgage Insurance
Lender’s Application Fees
and your own legal fees.It might be an idea to speak to a lender or broker to get an idea of what these would be given the value of the property that you might be looking to buy. I’m sure Terry or I could calculate those for you.
Good luck
RegardsNeil and Kate Gorman
Mortgage Broker
Mortgage Choice – there’s only one choice
tel: 0430 500 848
e-mail: [email protected]Dear SK2,
My response to whether you should go and see a mortgage broker, or better still get them to come and see you would be whats the harm?
I appreciate that I am a mortgage broker so I am likely to say that, but most of us don’t charge you for our services, and get paid by the lender when and if you decide to pursue a loan through them.
The benefit is that we do the research for you. I know for example of 10 lenders that provide 100% loans, so though the rate is obviously important there might be other factors that you’d like considered as well. The ability to make extra repayments, offset accounts, etc etc.
If you do decide to go through a broker I’ve included some questions you might want to ask to determine whether they are the right broker for you:
1. Can the broker clearly explain in writing:
• The process the loan application will take from enquiry to settlement?
• Full disclosure of commissions received and how they are calculated?
(Not merely the fact that they are paid by the lender but the amount and how it is calculated).
• Their Complaints procedure and Privacy policy?
2. Can the broker demonstrate professional standards?
• Have they completed an accredited training course?
• Are they familiar with and comply with the Uniform Consumer Credit Code?
• Do they carry adequate professional indemnity insurance?
• Are they a member of the Mortgage Industry Association of Australia (MIAA) and comply with the
Code of Practice?
3. Is the broker working in your best interest? If so, can they demonstrate:
• They receive the same amount of commission regardless of lender or product chosen?
• They do not have branded products of their own?
• If they have their own “branded†products – clear reasons for any recommendation of those products?
• They disclose any alternative forms of remuneration?
• They disclose any referral fee they pay for being introduced to you as a potential client?
• They have a Customer Charter that clearly outlines their service levels, remuneration and dispute resolution policy?
4. Do they have at least 15 lenders on their panel?
• Can they offer a wide range of lenders – banks, non-banks, building societies, credit unions etc, to choose from?
5. Can they offer a choice of home loan?
• Will you receive a written comparison of home loan options including the upfront and ongoing fees?
• Are you satisfied that there is no conflict of interest? In other words, the lender and product are the right loan for you and not the broker.
6. Will an estimate be given of the recommended lender’s loan processing time?
• Will any history of lender delays be discussed with you?
7. Do you consider you have been encouraged to borrow within your means?
8. Will the broker charge you for his/her service?
• Outside of the normal lender application fees, there will be no fees requested by the broker to cover their individual costs.If you have any other questions feel free to give me a call.
Best wishes and good luck
RegardsNeil and Kate Gorman
Mortgage Broker
Mortgage Choice – there’s only one choice
tel: 0430 500 848
e-mail: [email protected]Dear small_time,
Sanjiv provides some very good advice.
Reference the 100% loans that he mentions, be aware as Sanjiv has implied earlier in his e-mail, that although you can with some lenders borrow up to 100% of the purchase price you will still need funds to pay for the closing costs.
Many of my clients assume that because they can borrow 100% of the purchase price they will not need any other funds, which is unfortunately not the case.
Kind Regards
NeilNeil and Kate Gorman
Mortgage Broker
Mortgage Choice – there’s only one choice
tel: 0430 500 848
e-mail: [email protected]Dear Queen,
Sounds deplorable to me. Common sense (and decency) would suggest that the costs should have been outlined to you.
What stage are you up to now?
Have you managed to get any sort of resolve?I was interesed to read the discussion about whether you as a property investor, i.e. using mortgages to buy property for business or investment purposes, were covered by the UCCC. Like Terry, I would have assumed that you weren’t?
Good luck with it all, again like the others if can be of assistance please let me know,
Regards
NeilNeil and Kate Gorman
Mortgage Choice
0430 500 848Dear Steve,
the three things I’d be interested in is:
1. Advice as to whether I spend my search time searching locally or globally
2. News on where major infrastructure projects are happening/ planning to happen (that might affect rental demand) e.g. new highways, rail lines, building of new unis, hospitals etc
3. Summary of major economic indices – unemployment/ inflation/ interest rates, retail spend etc, and comparison to last year/ 5/ and 10 years
Thanks
Neil
