As long as your handle name doesnt represent your employment status i cant see an issue as long as serviceability is evident.

I am not sure i would do it as an owner builder loan and would suggest subject to equity you merely do it as a "cash out" deal and control the cash flow yourself.

Couple of lenders spring to mind that would allow such a purpose.

Cheers

Yours in Finance 

Hi Paulie

We do a fair bit of SMSF lending and set up's and to be honest i agree with you i think you will need more than 60 days for Settlement.

Realistically it could take a potential lender 21-28 days for finance and then documentation about the same again.
Costs and documentation requirements are obviously a little more in depth than they would be for a standard residential SMSF application so you need to allow for this.

Also remember once the funds have been rolled over (and i think 21 days over Easter is possibly bullish depending on the retail fund they are coming from) you will need to establish the Bare Trust / Security Custodian so that the property Contract can reflect the correct purchasing name.

You are unable to go to Contract until this is set up and the timing is not ideal.

Cheers

Yours in Finance

Lila

The reason being is that the interest on the investment loan is Tax deductible irrespective of the security which it is secured against so you want to try and maximum your deductible debt and minimise your non deductible debt.

Even if your PPOR loan repaid you would probably be better off taking interest only with 100% offset account on the subloan secured against your PPOR and interest only on the standalone loan secured against the IP itself.

I would always try and go for 80% on the IP subject to your available equity or investing goals.

Many clients wish to maximise their borrowings and therefore happy to take the loan upto 90% and use less of their PPOR equity so they can buy again.

We will also suggest once the IP has increased in value you get it revalued and then redraw back upto 80 / 90% of the increased valuation and pay down the sub loan secured against your PPOR.

These funds can then be re-used for the next Investment property or just left to sit there.

There are some excellent base rate investment loans out there at the moment which are ideal for investors.

Hope this makes sense.

Cheers

Yours in Finance

Annie, even at a 90% lvr some lenders / mortgage insurers will have a problem with less than 2 years contracting.

Easy answer is to flick Jamie an email when you are ready to go and get him to sort it out for you.

Why not get a professional on the job.

Cheers

Yours in Finance

The boys have stolen my thunder.

With a decent amount of equity in the property it is also important you structure the loan correctly to ensure going forward is not happered with cross collateralised loans.

Cheers
 

Yours in Finance

Hi Darren

Small Development funding has some many variables it is not a matter of 1 loan fits all and will depend on so many factors it is not funny. Had to believe but a lot of lenders will not allow for 2 properties on the same Title so unless you can get the land subdivided prior to construction this will eliminate some choice.

Buying thru a Trust with Corporate Trustee will make no difference as would be an expected structure however may add a little to some of the costs as some lenders charge for perusing the Trust Deed. Small bickies if the rest of the deal is correct.

Make sure you dont use your PPOR redraw for investment purposes as you will contaminate the interest deductions and not be able to claim such if it is not set up correctly.

Also many lenders will not factor in potential rent on the new properties until such time as they have been completed so that is something you need to bear in mind if serviceability is tight.

As i say we do a fair amount of this sort of funding and without a lot more hard data an answer is impossible.

Cheers

Yours in Finance 

Definately agree Aaron.

If the level of enquiry from clients saying "my current lender has just declined my loan, can you help" is anything to go by it is only going to get worse and worse.

Cheers

Yours in Finance

lawsjs

I think you misread my post.

What i said was we do these loans as  "second homes" loans and not investment loans.

We only deal with 3 US Lenders who do investment loans to Foreign Nationals.

Cheers

Yours in Finance

Totally agree that the way to go would Interest only with 100% offset account but unfortunately you wont be able to fix the rate of interest on the loan and still utilise the offset account (odd lender exception).

You may want to therefore look at splitting the loan between a fixed rate and variable and link the offset account to the variable portion of the loan.

This way you can get the best of both worlds.

In regards to whether you can borrow funds for the renvoation this will depend on whether the work is being undertaken by a licensed builder and if so whether the lender valuer agrees that the valuation will increase accordingly.
Either way the Bank will want to control the funds payable to the Builder.

Remember even at a 95% lvr + LMI the capitalised LMI will be limited to 2% of the purchase price and you will have to come up with the balance. In addition to your own legal costs you will still have the mortgage registration and transfer.

Might want to double check how much you will need to make sure you have this up your sleeve.

Cheers

Yours in Finance

Agree with Terry.

There are some lenders i can think off who wouldnt have an issue (we have done similar for 101 other forum clients) and others who would run a mile.

Correct lender choice is parramount.

Cheers

Yours in Finance