[Mick CParticipant@shapeJoin Date: 2010Post Count: 1,099]

July 2, 2012 - 2:49 pm

1. Don’t cross! if you have enough equity to cross your loan…you have enough equity to do it as 2 separate loans with a split loan or LOC.
Plenty of topics regarding crossing etc…

2. 95% LVR non-genuine saving loans is available- but i can tell you now it’s close to impossible to get this approved if it’s done using a unsecured personal loan- i have done soooo many non-genuine saving loan in the past and the LMI people will not touch your loan if it’s done using a personal loan- especially if your borrowing the stamp duty as well ie zero savings…

3. All non-genuine saving lenders has a max cap of 95% — so you will need to have some money for the LMI.-

4. Also if you need to resort to getting a personal loan and potentially borrowing 105% of the money + LMI cost to get the deal done …i would say your NOT ready to buy. As not only are you getting a mortgage your also got a massive personal loan to take care of now as well…no matter how POSITIVE the deal is…it won’t make up for the lack in cash flow…

4. You will make a lost every month using a personal loan, unless you buy something over 11% in yield

5. Doing the math; Say you purchase at $300,000 with a rent of $600 p/.w ( yes it’s high….but lets presume best case scenario?) with a gross yield of 10.4%

– $15,000 for the 5% deposit
– $13,000 for stamp duty ( VIC)
-$3,000 for another closing cost and searches etc..

= $31,000 personal loan – 14% interest over 5 years = $721p/m

—-

-2850,000 loan at 95% ( presuming it get’s approved)
– $7,500 for LMI ( also presuming it’s get approved and can be capped over the 95%)

Loan – $292,000 – rate of 7% (sample rate) = $1,942 p/m

---

Rent = $2,600 p/m ( presuming you get something at 10.6% yield )
Out going on loans = $2,663

* Your breaking even on a 10.4% yield
* have not taken in consideration management fees and another cost
* If rates goes up…..
* No tenants….

6. To find something with over 9% yield it would most likely be a security not located in the metro, unique security or should i say it most likely wont be acceptable or approved at 95% LVR lending, unless you have a past history or some good backing in security/equity….

Out of 100 properties that has over 9% yield i can say at least 85% of them are done at a LVR of 90% or less, and we were able to get 95% LVR for the remaining part because it was a strong file..and having an personal loan will weaken the file.

Sorry for a negative post, but we in the past have dealt so many 1st time investors who thought this would be an easy deal simply because they had a good income…

There are plenty of good deals out there, but it may NOT be the right deal for you at this point in time. Learn to save up first.

Regards
Michael

Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me

Same Banks. Better Rates. Served With a Passion.

[Mick CParticipant@shapeJoin Date: 2010Post Count: 1,099]

June 30, 2012 - 1:10 am

As mentioned for development of 2, you won’t be able to get it done with an GRV lender/product.

Give CBA a fick and shoot Richard an email…

Regards
Michael

Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me

Same Banks. Better Rates. Served With a Passion.

[Mick CParticipant@shapeJoin Date: 2010Post Count: 1,099]

June 24, 2012 - 9:01 am

usmic wrote:

Hi I recently graduated from university. I took a Fee help loan of 85K + interest. Will his have a huge impact on my borrowing capacity?

Define ” huge”

But yes it will have an impact..

Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me

Same Banks. Better Rates. Served With a Passion.

[Mick CParticipant@shapeJoin Date: 2010Post Count: 1,099]

June 24, 2012 - 7:51 am

Daneo79 wrote:

Hi Richard,

When setting up a DF Trust with corporate trustee, do i use a non trading shelf company?
And who is the best person to set up the trust?

Yes non-trading most of the time.

your accountant can set this up for you, but you may want to check that your accountant specialize in the field of property accounting …since there are different fields of accounting…

Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me

Same Banks. Better Rates. Served With a Passion.

[Mick CParticipant@shapeJoin Date: 2010Post Count: 1,099]

June 24, 2012 - 6:24 am

MACQ wrote:

Also do they have corporate subscriptions?

Yes they do.

Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me

Same Banks. Better Rates. Served With a Passion.

[Mick CParticipant@shapeJoin Date: 2010Post Count: 1,099]

June 22, 2012 - 3:04 pm

xdrew wrote:

Avoid the YES men, people who are too willing to say yes .. .

The good old YES mens/womens…they are a disease in every industry…especially politicians

Regards
Michael

Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me

Same Banks. Better Rates. Served With a Passion.

[Mick CParticipant@shapeJoin Date: 2010Post Count: 1,099]

June 22, 2012 - 1:45 pm

^^ Derek is spot on!! I have a feeling Derek is a Buyers agent by day and a broker by night

But in summary, doesn’t matter how much of your LOC you have used banks will look and calculate on the full limit.
Also the bank has the right to reduce or stop your LOC at their discretion….so your broker will need to do the research before hand to check and get an idea what your property might be worth – Most brokers should have access to a range of valuation tools.

Regards
Michael

Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me

Same Banks. Better Rates. Served With a Passion.

[Mick CParticipant@shapeJoin Date: 2010Post Count: 1,099]

June 22, 2012 - 1:40 pm

1. 70% GRV with 2% over mortgage rate and some pre-sales sounds about right,,, you only need pre-sales when you go over the standard 60% GRV OR you personal lack asset and the bank thinks there is a chance they may not be able to recoup all their cost and fees back.

2. Yes lender will pay out the mortgage and take over all the security + register the new deeds and title should a new one be issued etc.

3. Lenders will never take risk on any development, especially if they have NOT dealt with you in the past and don’t know your history…so yes it may be a bit rough for the developers- but since it’s your project you should be happy to wear most of the risk.

4. Serviceability are NOT done using the normal residential calculators, especially with lenders that provide GRV construction loans.

Things to consider
– Rent can be accepted but it will be discounted based on the lender, it ranges from 50-80%
– sensitivity assessment rate is higher then residential
– Loan terms is shorter
– Interest can be capped
– If your intention is to sell most GRV lenders will NOT allow rent to be included…

5. Yes Interest can be capped

6. Teling the lender if you sell or not will depend on your file, hard to say without knowing your financial strenght and situation….also it’s good to compare the rate and LVR but also compare the exit fee too sell the units within 12 month of development- lenders may have a2-3 month interest penalty for selling rather then keeping the units.

2-3 month worth of interest is like $10-20k ( depending on loan amount) and this can add quite a bit too your profit given your only probably taken up this loan for 12-16 month only.

Regards
Michael;l

Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me

Same Banks. Better Rates. Served With a Passion.

[Mick CParticipant@shapeJoin Date: 2010Post Count: 1,099]

June 14, 2012 - 1:54 pm

I been too a few of Nathan’s talk and im a true believer of this strategy ( not necessarily where he buys…but the strategy behind it) i have also referred some of my clients to his program and no i don’t receive any “referral” fees which is fine- as it’s not my business too.

Learn and adopt the strategy too your own experience, budget, lifestyle, risk tolerance and style.

Regards
Michael

Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me

Same Banks. Better Rates. Served With a Passion.

[Mick CParticipant@shapeJoin Date: 2010Post Count: 1,099]

June 14, 2012 - 7:51 am

Generally speaking I/O with an offset is preferred by most investors and even home owners…however it will depend on your goals, plans, borrowing capacity and product/rate ( ie some lenders charge a higher rate for i/o…..and some products don;t allow for i/o at all).

If your not too sure what your going to do and have no short/long term goals etc…then stick with I/O with an offset it provides the highest flexibility and it’s hard to go wrong with that set up, especially if it;’s an investment property

Regards

Michael

Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me

Same Banks. Better Rates. Served With a Passion.

[Mick CParticipant@shapeJoin Date: 2010Post Count: 1,099]

June 9, 2012 - 7:24 pm

Maybe if you can save just a little bit more and push your range too low $200 you will have a bit more choose in Western Sydney – ie TREGEAR ( $200,000- $230,000)

Regards
Michael

Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me

Same Banks. Better Rates. Served With a Passion.

[Mick CParticipant@shapeJoin Date: 2010Post Count: 1,099]

June 9, 2012 - 7:21 pm

Hi welcome!

The bank is correct in saying your liable for the entire loan amount, Ie if your friend can’t afford too pay you will have to pick up his/her slack- ie the bank can’t sell half a property.

Regarding your future borrowing, only some lenders will calculate your future lending based on the full amount; if this is an issues it’ just a matter of choosing a lender that fits – ie One that will calculate based on the % you owe.

Regards
Michael

Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me

Same Banks. Better Rates. Served With a Passion.

[Mick CParticipant@shapeJoin Date: 2010Post Count: 1,099]

June 8, 2012 - 11:02 am

Strata, management fee + have to paint and change the carpets every x number of years

Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me

Same Banks. Better Rates. Served With a Passion.

[Mick CParticipant@shapeJoin Date: 2010Post Count: 1,099]

May 28, 2012 - 12:18 pm

Jamie M wrote:

If you want an amazing broker in the ACT – joking

Cheers

Jamie

Surely we can’t leave out the Awesome ACT finance broker from this equation!

Jamie Moore from passgo! phone. 1300 656 299

Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me

Same Banks. Better Rates. Served With a Passion.

[Mick CParticipant@shapeJoin Date: 2010Post Count: 1,099]

May 28, 2012 - 12:14 pm

Solomon10 wrote:

Thanks Jamie and Terryw, would you use any of the big four towards the start of your property buying and smaller lenders when coming close to "the wall" or vice versa?

Generally having one of the big 4 for your first 1-2 is ok especially for your PPOR as they have decent policy, rates and access to more ATM’s etc…once you start to build a sizable IP portfolio/ managed funds etc we would start to consider using lenders with better serviceability model ( from a investors point of view) and utilizing different type of techniques ( When to fix, P/I , Interest in advance, equity release ).

Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me

Same Banks. Better Rates. Served With a Passion.

[Mick CParticipant@shapeJoin Date: 2010Post Count: 1,099]

May 26, 2012 - 1:09 am

tmr wrote:

ssusanh wrote:

 I would like to get back into my own home after a disasterous relationship where I lost everything.  Unfortunately I don't meet traditional requirements.  I have a great secure government job with a steady income, but very little else.  I'm looking to vendor finance a cottage in the Blue Mountains.  Where do I start?

and one day before settlement knowing before hand I would be short of cash to get over the line, I maxed out 5 credit cards (for the purpose of the loan a stat dec to the bank saying I was happy to cancel all cards if required, meant I could keep them, and not affect my borrowing capacity) to the tune of $37 000, and handed over the cash to the bank for final settlement.

Just wanted to give readers a heads up, in case ppl reading plan on using this strategy ( if you could call it a strategy )
it worked for Mark which is all good! …more then 5 years ago…but in this day and age this def won’t work now! and you would risk losing your deposit if you plan on using this ” lucky strategy”

Be creative, but play it safe.

Regards
Michael

Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me

Same Banks. Better Rates. Served With a Passion.

[Mick CParticipant@shapeJoin Date: 2010Post Count: 1,099]

May 26, 2012 - 1:01 am

If you could provide some numbers, LVR and how much savings you have etc might be able to work something out…no promises

Done a loan for a client in a very simliar situation, Client knock down the property and realize 3 month alter the land value is less then they expected + they had no deposit to make up for the short fall or to start the construction.

Approached us; we supplied private finance of $85,000 secured against their 2 cars and had to refinance their loan over to an acceptable lender that was willing to accept non genuine savings construction ( ie the private personal loan) over 80% LVR.

Doesn’t suit everyone as every situation is different.

Regards
Michael

Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me

Same Banks. Better Rates. Served With a Passion.

[Mick CParticipant@shapeJoin Date: 2010Post Count: 1,099]

May 25, 2012 - 12:13 am

Peterc01 wrote:

I am in a similar situation, I have owned a business since sept 2011 and would like to sell our IP as its neg geared and not a tax benefit anymore.

With less then 2 year ABN + being a start up business i doubt you will have a stable income that you can produce – you will need to go into Low-doc funding. All the majors low doc funding will not suit your requirement – you will need to contract a broker to get this sort of deal over the line- especially with low-doc loans; Pop Richard an email.

Regards
Michael

Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me

Same Banks. Better Rates. Served With a Passion.

[Mick CParticipant@shapeJoin Date: 2010Post Count: 1,099]

May 21, 2012 - 1:15 pm

Terryw wrote:

It is not the loan that matters but the % ownership on the title of the proeprty.

Pretty sure OP jsut accidently used the wrong terminology – i be scared and worried if this is what the accountant advised

Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me

Same Banks. Better Rates. Served With a Passion.

[Mick CParticipant@shapeJoin Date: 2010Post Count: 1,099]

May 21, 2012 - 1:12 pm

You save money from owners builders only if you can mange the project well in term of timing and planning…

Ie Contractor A is not waiting for some Contractor B to finish before they can start etc…it’s like a puzzle…you can do it step by step and take forever to build and potentially leave some steps out?

or get an experienced builder / project manger involved ( essentially that what project home or custom builders are… project mangers) and do it in a shorter period of time ( hopefully).

Some would argue and say how much are you willing to pay someone to project mange your build? 10-20%? less headace, time, set cost backing and better LVR etc…

—-

Granny flat – $70k total for a standard 2 bedder (weather board at this cost of course..+ non-pitch roof.)

Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone Me

Same Banks. Better Rates. Served With a Passion.