Forum Replies Created
Exactly as Terry says.
If the interest rate is greater than the housing rate then you will just claim the interest the same as you would with any loan that is for investment purposes.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
It will all depend.
Some of the lenders / mortgage insurers will not have a problem with it as long as the overall serviceability is there others will want to see either equity or genuine savings.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
And is the other 25% coming from your own savings or sources.
Richard Taylor | Australia's leading private lender
No they do but insist on a separate bedroom and laundry.
Can be 25 Sq Metres as long as it has a separate laundry. Go figure
Richard Taylor | Australia's leading private lender
Min 40 Sq Metres now with the Dragon.
Used to go to min 25 Sq M but those were the days.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
York
i wish you luck as away from a couple of hard nosed private lenders i think you will find it difficult if not ni impossible to obtain finance on such a property.
One or 2 lenders might look at 50% lend but you would need to come up with the balance.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
JacM
As Terry has mentioned as long as you are aware of the short term negatives of buying in Trust then really if you are the Trustee then your Bank shouldnt have too many issues in amending the application.
It is just where you have a Corporate Trustee many lenders like to ub their hands with glee as they can charge more for assessing the Trust Deed or not discounting the interest rate. In saying this there are many lenders who dont charge any more for borrowing in Trust and this is where you may need to shop around.
Richard Taylor | Australia's leading private lender
Hi Matt
I admire your enthusiasm however am not sure whether you have fully understood the way in which the deal would work.
I am assuming the Title is in your name and therefore ONLY you can claim any of the Tax deduction that would be available. Being still at Uni and working part time the deductions would be negligible. If however you purchase the property at a PPOR then this wont apply anyway.
Now i am assuming that your parents drew up a Mortgage which you signed lending you the money at whatever rate and terms you negotiated.
Personally i can see why they used a Line of Credit but wouldnt have suggest this as a loan structure.
I would assume that they will want you to pay the loan off as quickly as possible in order to free up their access to funds and therefore would suggest as soon as you can do so you take out a loan on your current property and pay them back.
Now with regards to your next property. I think the biggest issue is going to be serviceability rather than access to equity as clearly with an unencumbered property at the moment you could tap into the equity here to fund the deposit and acqusition costs but proving you could fund the loan is going to be the hard part.
Think you might need some professional assistance in going forward.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Well say maximum $700 for a qualified Solicitor to draw up a Option Contract thats a $5300 savings.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I agree with Terry each Call Option contract i have ever used was specifically drawn up for the project in mind and do not believe that 1 hat can fit all.
Terry is a lawyer and maybe for the fee he mentioned he could assist you.
Would save you a lot and also you are getting some first hand expertise.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Nick
Coming in a bit late in the peace but heh here goes.
Firstly i will assume that you have already got pre-approval for a 95% lvr as that sort of lvr in a regional town might prove harder than you think. I can think of a couple of lenders but thats about it unless your existing customers.
Over and above this if the properties have been renovated then you would expect to be able to claim on both the Capital Allowance / Depreciation which being a non cash deduction will help defray some of the monthly shortfall.
Richard Taylor | Australia's leading private lender
Bluedog
Really sorry to read of your pain but i am not suprised.
I will be careful what i say but i think your post should prove a warning for other thinking about using such organisations.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Terry very true but me thinks he would fail on credit scoring then full stop lol.
Richard Taylor | Australia's leading private lender
Switch both loans if not already to interest only with 100% offset on the new PPOR and ensure you have done a Depreciation report on your IP.
This should reduce the monthly cash flow and give you time to decide what to do when you are ready to leap.
Richard Taylor | Australia's leading private lender
Terry has taken the words out of my mouth.
Keep the loans separate for a number of reasons one being the LMi will be cheaper if you mix it around.
Gave a client a quote today between the Bank we had recommended and CBA who he had gone to previously and there was $1300 difference in LMI. His CBA Banker told him not to worry about it as it was Tax deductible however i told him to tell the CBA to cut the premium by $1300 and you would go to them or "adios amigo".
Structure it correctly and you can still get what you want.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
How are you going to access your Superanuation ?
With only 7 months in your current employment it is going to be hard unless you have been in the sme line of work for 3 years in total and ideally 3 years in the same residence would have been prefered.
$1000 savings is not going to be anywhere enough as that probably wont even cover the mortgage registration / transfer fees in WA let alone conveyancing costs etc etc.
The FHOG will not be counted as genuine savings so you will need to have a lot more over a 3 months period.
Richard Taylor | Australia's leading private lender
Just one other point worth mentioning to those already raised.
Dont let the Selling Agent / Developer push you into having to go unconditional on your finance so the Developer can use your Contract as one of those he needs to show his Bank in orer to obtain the construction funding.
No lender worth their salt will give you an Unconditional Approval on an off the plan property without do a final inspection.
I had one client ring me yesterday to say the Selling Agent had said if he was prepared to sign an unconditional contract the developer would give him a separate letter saying that if the finance wasnt approved he could still pull out.
And i thought it was only second hand car salesman that were that dodgy.
Richard Taylor | Australia's leading private lender
Just make sure your lender / mortgage broker doesnt suggest to you that you offer your PPOR as security and cross collateralise the 2 securities.
Be suprised how many Brokers / Bankers have no idea about loan structuring and are keen to take every bit of security they can get their hands on.
Richard Taylor | Australia's leading private lender
I certainly would not be paying down the IP loan and would if not already be switching it to interest only.
Your Mortgage Broker should be able to suggest ways in which you can structure the loan appropriately and save interest at the same time.
Richard Taylor | Australia's leading private lender
Maybe able to do it as a residential loan subject to the location.
More regional it is harder to finance.
City or regional town should be able to be done at a competitive rate.
Richard Taylor | Australia's leading private lender
