Forum Replies Created
Hi Chris
I must admit i read your post a couple of times and got myself lost.
There are so many variable when it comes to serviceability it is not funny so we will make the assumption that the Anz calculator i about right.
What you have to realise there is a big difference between equity and useable equity.
Equity can simply be described as the difference between the valuation and the loan amount so on your figures this would be $60,000 being $160,000 less $100,000.
Usable equity is the difference between the loan amount and the maximum percentage a lender will advance again the valuation.
Assume this is 90% then the useable equity is $160,000 x 90% = $144,000 less $100,000 so is $44,000.Having equity does not increase your borrowing capacity as this is solely based on your income and expenditure.
I am not quite sure what you are trying to achieve so if you give us a bit more information we can advise you further.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
You wont be able to refinance to a 25 year interest only loan (with the odd exception) but depending on the lvr could make it a 10 year interest only term.
No advantadge in refinancing to $204K interest only as you wont be able to claim the interest on the difference.
In my opinion you would better of to set up a separate split.I guess you need to ask "what do you want to achieve out of the process" and then work backwards from there.
Without more hard data in relation to your circumstances it is difficult comment fufther.Hope this helps.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Peach
Look hate to say the advice your mortgage broker has given you is incorrect.
You certainly dont need to be buying with your brother but you do need any new loan application taken out on a security that is jointly owned to be in all names. You say that you own an amount of $228K but i assume that the total loan on the property is actually $458K. If this is the case you are actually jointly and severally liable for the entire debt. You dont mentioned whether there is any loan on the Toowoomba properties.
There are a couple of lenders that wont reduce your borrowing capacity and allocate 50% of the rent and 50% of the liability to you despite the J & S position. You do not have to use Homeside on your new purchase.
So unless you can convince your brother to take out a similar loan (and they both be in all 3 names) i.e If you could access $100K in equity then you would take out 2 x $50K splits you wont be able to get to use any of the increased growth.
Must admit i have been known to work the odd bit of magic in my time however there are limits.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
And i certainly wouldnt be seeing C & N for the advice unless you go with a deep chequebook.
Call either Michael or Jamie and the credit advice is free.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
The agents sales costs are deducted from the purchase price when it comes to Capital Gains tax purposes so as long as the Contract is dated this Tax year you will be able to show the Gain in this years Taxable income.
Dont forget however you also need to discount the market valuation (I will assume you did a valuation) from when the property was first available for rent by any future Capital allowance claim you have made subsequently.
Do all the approximate calculations first to make sure the net figure after Capital Gains Tax you come out with will be sufficient to pay out the bad debts you refer to and acquire the PPOR. To late once you have accepted a contract for sale.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Fence (luv the handle by the way)
Firstly welcome to the forum and hope you enjoyr time with us.
If the margin is there and I would want a minimum of 20% then certainly why not explore it further and go for it.
In saying this you need to be aware of a few things in relation to both the financing of the project and the Tax implications if and when you sell the property.
I am assuming the property is currently located on a single Title and many lenders will not allow mutiple properties on the 1 Title.
It is likely the Council wont allow you to Strata Title them until the construction is complete so financing might be an issue.In saying this there are many lenders who do welcome such applications on residential terms and conditions and understand the set up required in funding.
Ignore the online calculators as these are worthless when it comes to a specific project like this as there are too many variables.
An investor related mortgage broker can provide you with a more accurate idea of what your options are.Now i am unsure how you purchased the property or in what entity but hopefully did so allowing for the Margin Scheme when it comes to GST. If you intend to sell the properties once they are complete you would want to consider the timing of the sales contract
to see if you cannot differ the CGT into the following Tax Year. (Remember CGT is based on Contract date and not Settlement date).All in all if you have covered these points and you can locate a good fixed priced builder i cannot see any reason why you would not proceed to the next stage.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Epsom
No i agree with the boys your Broker is doing the right thing by you and not the Bank.
Bit more paperwork but shows you he / she is acting in your interest and not the lenders.
100% deductible and you still retain the use of the offset funds.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi booge
May i ask why you are making fortnight repayments on an IP loan especially when they are principal & interest repayments.
Extending the loan to 30 years will have absolutely NO difference to the repayments if they are interest only.You really should be making interest only repayments.
See what your Broker has to say and then post it on the forum and we can comment.
Remember most Brokers have no idea about investor loans.If you are not happy with the advice as i mentioned earlier shoot Jamie a line and get someone who knows what they are doing on the job.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
What repayment are you trying to calculate interest only or principal & interest repayments ?
Remember lenders calculate repayments monthly just a matter of you doing the division thereafter.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Booge
Wow there old friend.
Hope you havent gone to far with the IP refinance because if you have sounds like the structure is all wrong.
Do as Jamie mentioned and stick the surplus cash into your PPOR offset account or directly in the loan.
Why are you refinacing ?
Admitedly there are some crash hot rates around at the moment just make sure you dont cross collateralise your loans.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I am not aware of any lender that does not ask you to declare any other loans which you guarantee.
Even if they dont specifically ask the question i think you would have a duty to declare it anyway.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Deleted Post.
Got carried away and pushed the Post button twice.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I would agree with Jamie on his suggested strategy.
Why not shoot Jamie an email and get him to work some numbers for you.
You be suprised as to the varying lending options out there and as a Broker he will be able to come up with something for to suit your needs and requirements.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
A Financial Planner or adviser is one in the same.
They will both try and sell you a managed fund commission based product and will never recommend property as part of your portoflio.Trust me I am licensed and cant say i have ever come across another Planner who recommends property.
In regards to a Mortgage Broker I cant recomend anyone in Adelaide but guess it all depends on whether you need aface a face sit down or are happy to take advice over the phone or email. These days i would recon i see less than 10% of my clients and the rest we transact thru email or the odd phone call.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
HI morts
Personally i dont like to give specific lender recommendations on line as usually more hard data is required.
Whilst your wife's income will be used to determine how much she can borrow some lenders may still ask for your income details to show you can service your living allowance, dependants, etc.There are some excellent products around for such lending without application, valuation fees especially given the low loan to value. Many lenders will still want a reason for the funding but others will be happy for you to do with as you please without charging an arm and a leg for it.
I would try and split the loan between what you think you need for personal use and what you think you will use for future investment.
That way you can keep it nice and clean come Tax time.
Let us know if you need further information.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Cheeves
Sorry have to disagree with you.
Yes there are US lenders who will lend to Non Residents.
We do a fair bit of US lending for British clients through a couple of UK marketing firms.
NCCP in Australia has limited what an Australian Brokers can or wants to become involved in.
All about Public Liability and of course Credit Act doesnt apply to non residents so we are help them.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hate to say if you Broker is telling you that he recommended Macquarie because their exit fees are less than they used to be he is winding you up.
As from July 1 2011 no lender can charge an exit fee on a variable rate loan so you would wanting a better reason than that.
If it is a good upfront rate then i believe he has limited lenders on his panel.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi ggbeh
Firstly welcome to the forum and I hope you enjoy your time with us.
It is a very good question you raise and funnily enough I have a deal on my desk at the moment from a forum member in exactly the same position.
Off the plan lending can cause problems when it comes to timing as lenders will want to undertake a final valuation once the place is complete and wont normally be able to prepare loan documentation until the Title is registered. After which time you normally have 14 – 21 days to settle.
This coupled with the fact that a Conditional Approval normally is only valid for 60-90 days after which time information will need to be updated can often also cause issues.
In saying all of this we Brokers deal with such matters every day of the week and so most things can be overcome.
Personally if you believe that the property will be completed around April / May i think i would certainly be starting to liase with your Broker and start to collate documentation.
If it is your first property and you will be claiming the FHOG then there are a few extra items of documentation you will need so in my opinion never does any harm to start planning early.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Catalyst you thought you were confused.
I am totally confused.
You say you are renting at your PPOR. (Is that "at" or "out").
If you are currently renting out your PPOR then you wont qualify for the FHOG or SD concession at all.
In regards to the FHOG you can actually move into the property one day short of the first year that the property was available for occupation or the property being ragistered in your name and occupy the property for 6 continous months.
You do NOT have to move in within 6 months.
If you clarify the situation for us then we can provide further advice.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Me thinks that Richard10 who made his 1 and only post back in June 10 praising this company for their wonderful product and services might have been a Company plant.
Yours in Finance
Richard Taylor | Australia's leading private lender
