Forum Replies Created
Hi Matt
Sorry dont want to disagree with Jamie but there are some points that need clarifying first.
Is the house and land property and owner occupied property?
If so i would look to put in as much as you possibly can (Dont forget some lenders will cover the LMI cost or charge an alternative depending on the strength of deal itself) and then take an investment equity loan or line of credit against the property and use this as deposit for the 2nd property assuming it is for investment.
You want to maximise your deductible interest whilst structuring the loan correctly.
In saying this i think serviceability could be an issue depending on the actual numbers.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Dont normally disagree with Terry but i cant see why you would want to pay an Annual fee for a relatively small loan.
With NAB you wont get an interest rate benefit under their Choice package until the loan is > $150,000 and then it will only be 0.5% discount.
There are several loan products around with extremely competitive interest rates, No application fees or ongoing charges.
To me this is the sort of product you would look for.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
No she will make a couple more and then disappear forever.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
What lvr are you looking for?
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Why not get him to merely ring one of the QS firms and ask them.
Most in my experience will give you a good guide over the phone without having to go the expense of a full report.
Washington Brown / Depreciator / Napier Blakely are a few of the bigger firms with representation in most States.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Is the Zillmere property one offered thru NRAS ?
Good suburb but need to be careful on valuation there.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Entering the limited document market is a different kettle of fish since the introduction of the new Credit Laws came into effect July 1 however is still possible.
The level of documentation required varies considerably with some lenders not getting involved in this area of lending and others still prepared to consider applications.
There are a few important factors that will determine whether the deal can proceed but without knowing what you need and the basic terms it is difficult to comment further.
Richard Taylor | Australia's leading private lender
Taffygirl
Not sure which State you are thinking of buying in but as a First Home Buyer you maybe entitled to a concessionary rate of Stamp Duty.
If you purchase an IP first you will still qualify for the the FHOG but will probably loose the concession.
In Qld this means NO stamp duty at all on a purchase price of upto $500,000 and this is a big big saving.
The rent you would receive plus any Tax credit will certainly not be as great over a 6 month period as the Stamp Duty savings.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
evernat
As Terry pointed LMI is an opportunity cost and especially where it is charged for investment becomes a deductible loan expense.
Certainly if you can avoid or if the lender pays for it (Yes there a couple of products doing the rounds where this applies) then as long as everything else is equal and the product has all of the features you want then why would you pay over the odd for something that is cheaper elsewhere.
What you have to bear in mind is that LMI premium rates vary from 1 lender to another even where they are using the same mortgage insurer so to save your self a basis point hear or there may not be the best way forward if the LMI premium with that lender is more expensive.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
treb
Can i ask you who you have submitted the deal too?
Realistically CBA & NAB Agri Dept or Rabo Bank would be my first port of call.
Stacks are a private lender and probably worth considering if the above lenders said NO.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Lora
If you need a Residex report ran on a particular property you are more than welcome to shoot me an email and i will run one off for you and email it back.
I use the Comparative Market Analysis reports for some inter state properties i have been looking at it but have it Australia wide.
Whilst i wouldnt always say their information is spot on 100% accurate given that it is a computerised model it is a fair indication and certainly a step in the right direction when completing your due diligence.
An independant valuation will also give you an accurate assessment on the value but as most financiers do a valuation these days you could always rely on your lender. In saying this bear in mind the report is not always accessible to you but in cases where we can instruct the valuation and receive a copy we have an indication of the valuation price.
Even where the report is to not available you can work out how much the property was valued at from the percentage of lending you apply for and get approved.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Terry figures are spot on as usual.
One of the advantages in taking the loan elsewhere would mean that LMI is of course only worked on the exposure of the new loan and not the total exposure.
Still the odd lender who is doing NO Lmi to the client on 90% lvr where the application is a purchase so options are varied.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Jessica.
Welcome to the forum and I hope you enjoy your time with us.
Paul is one of those nice guys and a regular contributor.
Feel free to post away and ask questions or reply to questions already raised.
Sharing information and views and learning from other is what we are all about.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks for the wrap Terry (by the way anyone looking for a good Lawyer Terry is your man).
Working wonders depends on a many things.
It is course difficult to comment on the level of magic that needs to be peformed without actually knowing any of the details.
In saying this for of a lot Mortgage Brokers if it sounds difficult or complex often the simple answer it is "it can't be done".
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Firstly welcome to the forum Lora and I hope you enjoy your time with us.
Must admit I am slightly biased as i have all of our properties in Brisbane and SE Qld.
Personally i would avoid the CBD like the plague due to the high BC rates and short stay tenants and wouldnt buy in Woodridge.
I am a fax of the inner western suburbs such as Toowong, Taringa, Indroo although i also have properties in Carina.
Happy to email yo a Residex report on any property you are looking at it. I subscribed to assist me with my due diligence on some inter state properties i am looking at as every little bit helps in doing your assessment.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Welcome to the forum and I hope you enjoy your time with us.
There is nothing illegal about using equity over cash to fund your next deposit.
Certainly wouldnt be paying down the IP especially if you think one day you might buy a PPOR however i note you mention you will switch it to IO after the fixed rate ends. I would switching the variable part now.
Rather than use a LOC you could use an interest only equity loan as the rate might be slightly cheaper.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I know Linar has answered this post in the other Forum and i agree with his comments.
With 6 previous Credit entries on your file now i think the chance of obtaining a loan other than thru Private FInance is slim.
I can think of one lender who may have considered it from day 1 but they certainly wouldnt now as they are not a lender of last resort.
You dont mention how much you want to borrow or what the funds are for?
With Gross income of $4200 less any living expenses etc i think you are not going to be able to show much in the way of serviceability.
Richard Taylor | Australia's leading private lender
Yes was aware of the tunnell progress as my friend is the leading Engineer on the site with Leightons.
Hate to say to you obtaining a pre-approval wont do you any good as soon as you sign a purchase contract even with a pre-approval the lender will ring your husbands employer to confirm his employment and will be presumably be told his work has been terminated.
Done many a deal for a client in the industry and it is still possible but lender / mortgage insurer i have in mind would want to sight your 3 months savings statements to ensure on such a good income you have building up your Asset base.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Mat
Firstly welcome to the forum and I hope you enjoy your time with us.
No regretfully accessing equity in your PPOR will not enable you to claim additional interest when the property becomes an IP.
Interest can only be claimed on the current balance.If you need to acess the equity for a deposit on your new PPOR keep the loans separate.
Draw 20% plus costs of the new purchase price on your existing PPOR (future IP) and then 80% secured against your new property.Is one other option but before we go there. Is the property owned solely by you ?
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Couple of points worth mentioning:
1) For a purchase of around the $225K mark you will probably need at least 10% of the purchase price to cover the 5% deposit, mortgage insurance, stamp duty, application costs, mortgage reg & transfer. Given this you would need to be doing a very minor renovation.
2) Doing it repeatedly will cause you issues with both financiers as well as mortgage insurer (if required). Lenders will see your CRAA and assume you are doing this for income and the loans will be restructed to development loan criteria.
3) Not sure when you say "due to the nature of your husbands employment" this sounds like he is not in full time employment. This could cause a financing issue. Pre-approval wont get you over the hurdle if there is likely to be a change in his employment between now and when you sign a contract.
4) If you a Credit card limit that means you could draw upto 20% of the purchase price i am concerned that the limit is fairly high and this will go against you in Credit scoring.
Purchasing in a DFT at 95% with no other property assets will not be easy even if you have an existing relationship
with you current financier.Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
