When you say apartment package, is this an off the plan purchase? If so, you need to be aware that normally with OTP purchases, settlement is a long way away, and most lenders won't allow unconditional approval until closer to the date. Also valuation is done at that time as well and with todays market, it could mean a drop in value which could…[Read more]

Luke, just adding to Jamie's comments, you mentioned an initial loan of $300K, and now it is $450K. What was the extra $150K used for? Investments purposes, personal?

Investment would allow the balance to become deductible, personal not.

Cheers

Tom

Just to add to all the above, you mentioned that one of the loans was a PPOR converted to an IP. Is the other loan your current PPOR? If it is, I would suggest you only have one offset account and it is linked to this.

As others have mentioned, with $700K in loans, there are plenty of lenders out there who can offer under 6% variable rates. 6.68%…[Read more]

There is no set rule as far as I know for how much is too much. Each lender has their own subjective views on this and they differ from one another.

How many is "numerous" in your case?

Might be worthwhile trying a lender that doesn't credit score and looks at the deal on it's merits.

Cheers

Tom

In that case your current PPOR loan should also be changed to interest only.

Cheers

Tom

Offset is similar to redraw in that it reduces the interest payable on the loan by the same amount, the difference is that with an offset, the funds are sitting in a savings account which allows you greater flexibility when you need to use the funds, and also helps you for tax purposes if you convert the PPOR into an IP at a future date. Offset…[Read more]

As Bardon said, as you are considering in converting to a investment down the track, the loan should be as high a LVR as you feel comfortable with, and it should be IO. In fact all this applies to all properties that are already or will become investments. This maximises your deductible debt.

I will also add if you are disciplined with money to…[Read more]

Anything that helps de-risk the application for a lender and LMI insurer makes it more attractive for them to borrow you money. Jamie has mentioned a few items below that assist a strong application, another item can be a stable employment history (the longer in your current employment, the better).

Oh, and you will still be paying stamp duty…[Read more]

Hi Chris,

With OTP purchases as they are normally completed a long period after signing the contract, you need to keep in mind that:

1. Finance cannot be fully approved until closer to the settlement date;
2. The property may decrease in value and you may need to stump up more funds at settlement.

In terms of your security, it comes down to…[Read more]

mbuilding, from my quick calcs, I would have a purchase price around the $420K mark in mind, with 20% deposit plus approximate costs of around $20K coming out of the equity from the land loan, the remainder being a standalone loan.

However if Richard thinks that $450K is achievable, then it most likely is.

I suggest you contact him. His…[Read more]

Hi mbuilding,

First off the land with DA might increase the sale price to someone looking to purchase but it won't have an effect on what the lender will value at. They will look at the value of the land on its own. It however still seems you have enough room in there to use as equity.

So yes, you are able to use the equity in the land for say a…[Read more]

When you obtain quotes for insurance products, and they ask you if you have ever had any claims in the past X years, there is a reason for that.

Answer yes, and the premium automatically increases.

Why take the blame for something you haven't done? Get her insurance company to take care of it, or get her to pay cash for the damage.

If you're looking at 2 properties before Jan 2013, with your savings you will need to go 90% lends on both to cover deposits & stamp duty costs, etc. LMI will be applied but can be capitalised and is tax deductible.

IO on both with offset on one, excess cash to go into offset. Has the same effect as paying principal off the loan, however allows…[Read more]

Is the discharge figure effective as of todays date or a date in the future? I have seen lenders advise it as of a future date for some reason.

Also might need to take into account CGT consequences as well. Only one place can be your PPOR, so the other would be liable for CGT if you decide to sell up in the future.

Jenny111,

Are you sure you aren't getting it confused with stamp duty concessions for first home buyers? Currently at 20% discount up to $600K purchases, then 30% at the start of 2013, 40% at the start of 2014, and 50% as of 1st Sept 2014.

This has been in effect for over a year now. I doubt they would go to all this trouble in timing the…[Read more]

Qlds007 wrote:
Again don't want to picky but if you haven't purchased the properties yet the money can't be in an offset account.

That's what came to mind when I read the post.

Unless he has a PPOR loan we don't know about?

Coota,

As per Richard's post, what exactly are you referring to in terms of a master facility?

Also your figures might be out of whack. With 10% deposit and stamp duty, etc on a $450K purchase will set you back $70-$75K. Doesn't leave much change out of $110K as per your post for a second purchase.

Coota,

Its a nice area that you want to invest in, close to the city, public transport isn't hard to find whether it be trains, trams, etc which adds a premium to the rent demanded.

Being older suburbs, blocks are generally small with narrow streets, however house prices are above the Melbourne median, and with your budget you would definitely…[Read more]

The thing is lenders aren't stupid, they can foresee what is happening ahead and will adjust fixed rates to suit. Even at the height of the GFC, when variable rates were low, lenders saw things were going to turn around and rates were going to increase again, so lifted their fixed rates. People were so happy with the low variable rate at that time…[Read more]