Forum Replies Created
Hi Tim
Know the Deception Bay are pretty well and financed 3/4 properties up there over the last couple of weeks.
Agree with a lot of the comments already made. It has water but also has issues so be careful and dont pay over the odds for potential.If you want a Residex report run on the property shoot us an email and i can send it back to you.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Yes PJ will need to be fully Licensed under NCCP.
PJ sorry old mate at the moment ASIC are saying that anyone lodging an application at the moment could be from 12 weeks onwards to be processed so i would not be waiting until you find your first buyer to have your License in place.
Also have you throught about which lender you will using for such an enterprise.
I can tell you from many many years of past experience in wrapping lenders and wrappers and not the best of friends even done as a full business venture we ended up taking our business to National Credit level to get it over the line.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Not sure exactly what you mean by a partner in your land ?
If you mean a builder or someone to finance the deal without any security or at best a 2nd mortgage i think you have absolutely no chance in the current climate.
if you mean someone to finance the construction then this will depend on a few matters i.e General Asset position, number of pre-sales, past experience etc etc.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
No not an issue as long as the funds redrawn are used for investment purposes.
If the original loan was a PPOR then you would have contaminated the interest and real issue on your hands but if it a P & I loan for some reason on an IP and the funds redrawn are ONLY for investment i guess it is better than nothing.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi J & J
Firstly welcome to the forum and i hope you enjoy your time with us.
To answer your first question yes as long as neither of you have occupied this or another owned property as your principal place then you would be entitled to claim the FHOG. Claiming the concessional Stamp Duty depending in which State you are located maybe a separate matter.
The FHOG requires you to reside in the property for a continous period of 6 months commencing within the first 12 months of ownership so if the property is tenanted it gives you the flexibilty to end the Tenants lease and then move in.
Certainly you are able to access the equity in the current IP and use the funds as deposit and to ocver the acqusition costs but remember you want to be slightly careful in how you do this as the interest on the sub loan and PPOR loan will only be deductible once the property becomes available for rent so you dont want to contaminate the interest on the original IP.
Also remember the Title is what decides the deductibility of the interest and not whose name the loans are in.
You may need for servicing to have the sub loan on IP1 in Joint names and then in turn lend it to the 2 of you at the same rate and terms etc but your mortgage broker will be able to suggest the most effective way.
Might be an idea to restructure the loan initially so you are ready to go once you locate a suitable PPOR.
Any other questions pleased ask.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Unfortunately under NCPP it is difficult to provide a structured answer without further information on your goals and objectives so my answer will be fairly brief.
You obviously havent at this stage decided whether you will sell your PPOR or retain it and rent it out.
Initially why dont you convert the loan on your PPOR with your existing lender to an interest only loan with 100% offset account and this will at least give you time and flexibility.
Remember you mentioned you have made an offer on a couple of blocks so if these were accepted you would need to act fairly quickly in your decision making.
The other consideration is the zoning and location of the land.
I am hoping that it is standard sized block on an acceptable post code.You can still get 95% lvr on land (many lenders it is only 90%) however the other associated costs would need to be funded from your own cash resources or equity in your cirrent IP so i am hoping that the loan securities are not cross collateralised.
if you believe the current PPOR is in an area which will grow and the asset appreciate the certainly look to retain it and even consider fixing the rate to cap the negative gearing and reduce your interest rate risk.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
$3.99 / month with Bank West for a 100% fully transactional offset A/c
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Yours in Finance
Richard Taylor | Australia's leading private lender
beedie they are out there.
I would get a call every 3rd or 4th day from agents i buy through with DA/BA sites for sale and vendors who are desparate.
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Yours in Finance
Richard Taylor | Australia's leading private lender
WW i agree with you that the Brisbane market is softening although for someone who owns a property or 2 in the City it doesnt really worry me. I owe very little in relation to my portfolio so a few interest rate rises doesnt mean a great deal.
Rents came off the boil about 12-18 months ago and i think if you were highly geared you would be in all sorts of trouble.
In saying all of this i am certainly seeing some excellent opportunities for development where developers / vendors are finding the pinch and offloading their sites at prices we saw 5-7 years ago.
I do agree however i think the opportunities will increase if you hang and wait your time with a few more rate increases.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
And just to clarify the amount I am able to borrow will also be based on my ability to service both loans as a whole?
Yes this is correct.I am just wondering if this is the right way to think about it as I have read in some other posts it is best to split these debts up into different accounts and avoid cross collateral?
Definately dont cross collateralise so split up the loan accountsCheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Rome
Ok not convinced it is a proper 100% offset account as i say Flexi First doesnt offer such a product but either way we wont argue as it really doesnt matter.
As you wont need the funds for a PPOR redrawing the funds for a deposit on an investment property really doesnt matter so i would do this and then depending on the price top it up with your savings etc.
Only issue i can see is from what you have mentioned is that your circumstances will certainly have changed during the next 5 years and this impact will on your ability to repay the loan. Under NCPP your Bank or Broker will need to be making investigations into this and certainly based on the information the loan WOULD be unsuitable.
i think you are going to have problems.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Ok the plot thickens.
The Flexi First doesnt as far as I am aware have an offset but a redraw facility and there is a big difference.
Also hate to say if you are studying next year and on your current income i dont think you will service another loan especially if you intend to occupy the property.
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Yours in Finance
Richard Taylor | Australia's leading private lender
And if you ever think you might rent your PPOR out and buy another PPOR you should go Interest only with 100% offset from day 1 irrespective.
There is already a couple of present posts where forum clients are doing just this and have already paid down sizeable chunks of the PPOR loan only to realise they cant redraw the funds and claim them as a deductible expense.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Andrew
What you can look to do is purchase your spouses interest in the property (Course depending on your marginal Tax rates she might end up purchasing your interest in the property) whilst it is a residential owner occupied property and then when the property becomes available for rent the interest becomes a deductible expense and can be claimed.
Each State varies when it comes to Stamp Duty so check with your conveyancer.
Most lenders would have no clue how to undertake the Loan Transfer and in many cases wont allow (Had a classic case this week where the Bank said NO because they couldnt understand it so the forum client phoned me and we have the application already pre-approved subject to a letterhead valuation).
Drop us a line if you need some direction.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Rome
Yes i think i understood the numbers but was concerned that you are using a P & I loan as you mentioned you have paid off $80,000 to date.
It is not as easy as Martin mentions as there is a big difference between equity and usable equity and you can only use this if you cross collateralise the 2 loans which is certainly not recommended.
Not sure what product Wesuck have you on but will depend on whether you have an imediate need for the $40K in the offset account or whether you are happy to use this as deposit / acqusition costs.
What is your current housing position?
Course your income / liabilities also have a bearing.
Dont want to appear rude but actual numbers are important to advise further and dont expect you to do that on a open forum.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Rome
Mhh i am concerned already and hope your current broker didnt suggest the set up you have.
I would have suggested interest only with a 100% offset account from day 1 to preserve the deductibility of the interest and also to give you flexibility.
All i can hope is that you dont have a current PPOR loan or likely to in the very near future.
Depending on with whom the current loan is with will determine the suggest course of action and the plan of attack going forward.
Under NCPP (new Credit Laws) there are a couple of other considerations before a suitable recommendation could be made over structure and potential lender.
Getting it wrong could be expensive in a couple of ways
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Yours in Finance
Richard Taylor | Australia's leading private lender
Where is the property located ?
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Yours in Finance
Richard Taylor | Australia's leading private lender
Ok shame spouses have their use for times like this lol
Altenative you could look to sell the property into a Unit Trust borrow 100% of the PPOR value and the entire interest would be deductible.
Yes you would stamp duty and land tax would be need to be considered but depending on the numbers there could be a good monthly saving.
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Yours in Finance
Richard Taylor | Australia's leading private lender
brunowa are you married or own the property jointly ?
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Yours in Finance
Richard Taylor | Australia's leading private lender
I have a feeling they wont be offering you any bad testimonals.
Just ask her how many properties she has and that will give you an idea about her passion or whether she just in for the money.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
