In NSW, the only thing a vendor can do when a contract falls over is recover the deposit they are entitled to – 10%.

The Mortgage Adviser
http://www.themortgageadviser.com.au

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A real estate agent’s commission is not protected by the deposit. It only comes upon settlement. The deposit makes no difference to an agent besides showing who is more serious and ready to go.

The Mortgage Adviser
http://www.themortgageadviser.com.au

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I prefer houses. Also, I would invest now if it was affordable. Smart investing will improve your cash position and help you pay off your home quicker.

The Mortgage Adviser
http://www.themortgageadviser.com.au

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There are no benefits of P&I versus interest only that can not be bettered by using an interest only loan with an offset account if you want to reduce debt unless you are very bad with controlling your money. You also have the option of maximising deductibility at any time using IO with offset.

P&I should certainly never be used on an investment…[Read more]

You only need to live in a property for 6 months to be eligible for the FHOG…

http://www.fhog.info

You can borrow 106% in some cases. This depends on your ability to service the debt. If you borrow more than 95%, the interest rate will be considerably higher. If you borrow between 80% and 95%, mortgage insurance will be payable if they accept the…[Read more]

As Steve says, preference is for the interest only loans and NO LOCs. There is no need for them.

Also, staying with the majors usually provides the most flexibility when considering the fully transactional offset account as they have a lot of branches.

mitm, regarding an overview, it is pretty simple. Your company or trust buys the property, you…[Read more]

I am totally against using a LOC as everyone here knows. As for a P&I loan on an investment property, this is the most ridiculous advice I have ever heard offered to a borrower by a mortgage broker. I would not be using that broker any time soon.

Investments should always be interest only as it maximises your options. If you want to reduce debt,…[Read more]

I personally think the ship has sailed on Mandurah. I don’t expect too much more growth.

Clients of mine bought there early last year and had amazing growth. I don’t know how sustainable this is.

The Mortgage Adviser
http://www.themortgageadviser.com.au

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Originally posted by balihai:
can I use the offset for deposit and the purchase cost for my next IP?

If you use your cash in the offset it will not be deductible as you are paying cash and you will increase your non-deducible expense. This is a bad idea.

As outlined earlier, you should have another split loan for deposits and expenses for…[Read more]

Don, I think you have it back to front. The purchaser is the only one who can seek specific performance on the contract. The vendor gets to keep the deposit (and chase up to 10% of the contract price) and that is it. That is the point behind my argument of securing your entitlement by taking a deposit.

The Mortgage…[Read more]

Property is not the only investment that is positive cashflow. The time to invest is always now. I think looking at your 2000 purchase that has doubled in less than 5 years should be a good influence.

Have a look around at your options before settling on property. You might even consider idirectly investing in property through Listed Property…[Read more]

I break down property contracts to include two parts. The first part is the exchange which I believe the deposit is the consideration. The second part is settlement where the obvious happens.

Another reason why I believe this is because a purchaser can pull out. The loss of deposit only applies in States where the legislation states this. Even WA…[Read more]

When you start tossing fixed loans into the mix, it gets more expensive. Your loan contract will tell you how much it costs to get out.

You do not need to refinance anything to buy additional properties. Even if you have a fixed loan, you can add a split loan if you have additional equity. The new property can stand alone.

I say stay away fro…[Read more]

The no deposits has been discussed in another thread. It does not always work.

The Mortgage Adviser
http://www.themortgageadviser.com.au

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In my opinion, ‘consideration’ in contract law must be something of tangible value. A promise is not something of tangible value. In any case, I consider the ‘promise’ to pay a certain amount as the offer. For example…

Buyer A OFFERS Seller A 100k with conditions.
Seller A ACCEPTS Buyer B’s OFFER with those conditions.

Where is the…[Read more]

Seeing Derek is finally back, I thought I should also bump this thread up.

The Mortgage Adviser
http://www.themortgageadviser.com.au

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Hi Bali,

I agree with Steve. There seems to be no need to cross collaterlise your properties.

Regarding your question about some direction, you can do both depending on your loan structure. Using interest only loans and an offset account will allow you to reduce the expense of your non-deductible PPOR expense while still leaving funds available…[Read more]

A reason behind asking to only put down $1 is because the buyer may not have funds available but plenty of equity. If this is explained to the vendor, there is no reason why it should not be accepted.

A deposit bond may stem the problem but it would cost more than $1 (a few hundred actually).

The Mortgage…[Read more]

Hey Bandit,

I am just wondering if you are using an offset facility on your non deductible debt portion. This would certainly help improve your cash flow position if used properly with all your other loans.

Also, are all your loans set as interest only?

Being able to afford to keep going sometimes requires some slight adjustment to your…[Read more]

Hi Vanessa,

It is not illegal at all if you structure the ownership properly. If you buy a home in a company or trust name, you do not own it. You can live in it and rent it from the company or trust. The company or trust then repays the mortgage. The lot is deductible but you will have to pay CGT if you ever sell that home.

The Mortgage…[Read more]