Forum Replies Created
5 Years more in your own PPOR you would certainly be unwise to use your own cash.
Sure $6000 / week + is nice especially if it comes from ununcumbered property like mine does but it just doesnt make sense to advice like that from anybody who gives you advice like that.
Sorry i call it like i see it.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
You mention that the PPOR will become an IP eventually when you move out so i assume at this moment in time you are still living there for the time being.
If this is the case i would not be using cash savings as deposit but either bbe using your cash as security and borrowing 100% of the investment property or paying down the debt on your PPOR and taking out a separate loan for the same amount assuming your lender does not charge additional LMI.
Look without being funny advice from your friend is not practical and i guess there is variance in what is a healthy portfolio.
Saving up a 20% deposit on an IP when you intend to upgrade your PPOR down the track does not make financial sense.
I would suggest you get some Professional advice rather than advice from a mate.Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Mozy sounds like you should be getting a new Broker on board.
Cman as has been mentioned previously there are 2 points to bear in mind.
1. With the FHOG you need to occupy the property for 6 continous months commencing within the first 12 months.
2. With the Stamp Duty concession this will vary from State to State. In Qld for example it is 12 months but this may be different in Vic or NSW.
You may loose the Stamp Duty concession if you buy an investment property first but with the FHOG you will still get this.
There are the odd lender who will do 95% on a standalone basis without any genuine savings so this might be an option.
You could take the SD Concession meaning less required deposit pocket the FHOG and use it for your first IP.Cheers
Yours in Finance
Personally i wouldRichard Taylor | Australia's leading private lender
Hi Daniel
I have answered your PM but as Andrew said make sure you get your Solicitor to read the small print of the Instalment Contract.
Depending on where you are looking to buy will dictate when you will receive the First Home Owners Grant so dont depend on that being available on Possession in every State. Secondly make sure you are entering the contract for the right reasons as so often with a bit of hard work we find that we can obtain traditional style finance for a client rather than having to the VF route.
In saying that of course i still hold a decent portfolio of VF properties so sometimes it can be the only route for a client to follow.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Ryallsy as Terry has mentioned certainly dont use cash in your offset as deposit on your IP.
In regard sto the lvr you should look at this will depend on whether you are looking to increase your portfolio or whether buying the
1 investment property is your goal. Certainly there is no point in paying LMI if you have plenty of equity and are not intending to expand by buying a couple of properties.I tell my forum clients that LMI is an opportunity cost which gets to 2nd base that much quicker.
It is like increasing the purchase by the cost of the premium. If you would still buy the property even if it went up that much dont worry about the premium.Remember LMI incurred where the loan is for investment is considered a Loan cost and therefore is deductible over the term of the loan or 5 years whichever is the shorter. Proportional in Year 1 depending on when Settlement occurs.
Irrespective of which way you decide to go make sure the loan is structured correctly. Seen to many forum clients come a cropper where their lender suggested they cross collateralised the securities.
Your mortgage broker should be able to make some structured suggestion in this regards.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Richo
Yes you are merely buying your mother's share in the property so no GCT for you until you sell the property.
With the Stamp Duty you merely pay duty on the transferred amount.
Course the loan would need to be re-written and that would involve the release and re-registration of the mortgage but all in all a fairly simple exercise. I am doing one for a fellow forum member at the moment in almost the same situation as yours.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Richo
There are 2 parts to your question:
1) Stamp Duty. This will be charged on an investment basis and will depend on the value of the transfer.
You will get a credit for the Duty already paid on your share.2) CGT. Course this is not paid by you but by your mother.
Without hard data and the date of the Transfer it is difficult to provide further information but at least this is a guide.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
If you were a First Time Buyer in Brisbane you wouldn't have paid any Stamp Duty on a $500K purchase.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Sorry for the late response guys but if we go back to where we were pre Oct 11 you would be looking at around 1% S/ Duty on a PPOR loan.
I have all the figures at home and will try and post them later.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Jamie
Would make you cry if i told you what i costs me to fill up our Z4 we bought last year in the UK at $2.35 / litre +.
Convinced my wife that buying it and garaging for 11 months and year and only using it for the weeks we are in Europe was somehow an investment.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
And now CBA 40 down bps.
Looking better as each goes by.
At least next week we will have some sort of gauge as to what everyone is doing.
Not that rate is the main criteria when choosing a long term lender.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Danny
Sorry i have to question either the rate of interest being charged on the loan or the structure or manner in which you have the deal set up. If the loan is over 80% then you would incur LMI if you refinanced but i guess it all depends on how much you are paying on your personal loans. You could split the loan to safeguard the Tax deductibility but would at least be paying the non deductible personal debt off at a sensible rate circa 6.25%
A 250K loan on interest only with a 100% offset account or split combo loan with part Fixed interest only and part P & I could save you a couple of $$$ per month alone.
More hard data would be need to do the figures justice but sounds like your lender is not doing you any favours.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
John
Sorry without being funy i think you are missing the thread of the post.
There are a few US lenders who will lend to individuals buying in the USA on a residential deal but the questions raised initially was could you borrow from a US lender to buy within a Self Managed Super Fund and the simple answer as Mike has mentioned is No.
No US lender wil be aware of the legal requirements to buy inside a SMSF and are not going to vary their lending terms to accomadate such a request even if the borrow could explain the relationship between a Security Trust Deed and the SMSF.
In Australia SMSF lending a specialised area and many lenders over here still dont understand the legal complications of getting it wrong.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
See NAB went down 32 bps this afternoon.
At least that is something from one of the majors.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Exactly right Mike and this where it falls over.
You wont find any US lender finance such a deal although there are ways to get a Australia lender to do it and comply with SIS but that will depend on your current equity position on your Australian Portfolio.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Whereabouts are you looking Martin ?
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Same old story thought 35 bps off what base rate.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Geoff sorry to hear your Solicitor didnt point this out.
As Paul has mentioned the FHOG in Qld under a VF Contract is payable 12 months of possession however the other underlying condition is that you have re-paid a minimum of 10% of the Gross Sale Price back to the Vendor. Depending on the interest rate charged and the term of the loan you could find this is well over 12 months nearer 2 years.
We have this as a disclaimer in our VF Contract but you be suprised how many clients dont read it.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Agree with Jamie the SGB Portfolio product can cause more trouble than it is worth as an IP loan and their service stinks at the moment.
Think i would be working backwards:
1) What lvr can i get on NRAS. Likely to be between 70-80% max and who can i get it thru.
2) How can i raise the balance of my deposit and acqusition costs. Look to refinance the existing CBA loan initially (at 104K they are not doing you any favours or rates or fees) and maybe take out what i need for the deposit on this one and the next IP.
You only need the 1 offset account so the other loan can be a no frills style product.
Re-structure now to set yourself up for #3 when it comes around.
Must admit a cool miserable day in Brissie today and feel sick as a dog i think i could be Sean Connery and tb could Daniel Craig.
With a sore throat i even sounds a bit scottish this afternoon.Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Tb
Firstly welcome to the forum and I hope you enjoy your time with us.
Personally i would go interest only 100% Offset account or at least IO and have the offset account on your other IP.
I will assume that you dont intend to cross collateralise the securities or use your PPOR as security and will set up a sub loan secured against your other IP then look to do a standalone loan on the NRAS property.
I have seen many a NRAS property been down valued and Banks / Brokers love to suggest you cross collateralise the property with your PPOR or even use this as security to avoid finding out how much the NRAS property has been down valued and how much commission the NRAS salesman is earning out of you on the deal.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
