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From what i understand it’s only worth while to take out a SMSF if you have $150,000- $200,000 + else the fee’s involved would eat up any gains; Unless you have a strategy where you can make constant 10% yield.
Google a bit more details on SMSF and see whats involved + what the fee’s are.
http://www.colonialfirststate.com.au/prospects/FS2358.pdf
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MichaelMick C | Shape Home Loans
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Yes and no….If it’s with the same LMI provider and your LVR is dropping ( risk level is lower) and you have good payment history and CR file. then a request can be made to transfer the LMI amount over…
Most of the time LMI are not transferable because most ppl ask for a higher LVR ( increase risk) or they have some sort of default on payments/ CR file or go with a lender who uses a different LMI provider.
I would note: at 85% LVR NO LMI Is payable with a few banks these days, reduce LMI at 95%.
Can i ask why are you refinancing? better rates? cash out?
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MichaelMick C | Shape Home Loans
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No you dont! plenty of banks will take in consideration deductibility of interest and add back depreciation..
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MichaelMick C | Shape Home Loans
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OK.
If you can provide the rest of the below information, either me or Richard will be able to give you with an more accurate answer about your exact “borrowing limits/ amount” – Do you want me to post it here, or PMS/email you the answer/limit? ( likewise, you can PMS/email me or Richard the answers if you prefer)Questions applys too both applicants:
1. Provide the “base” income for each applicant (if your in an industry that get’s paid a lot of “allowance” “overtime” and “shift work” let me know…it will be calculated slightly differently
2. Are you both Full time? or is it causal, part time, contractors etc…
3. How much rent do you pay currently? or are you living at home?
4. Beside standard living expense, any another luxury expense and how much- ie Gym membership, special membership ( ie boating club),
5. What financial postilion do you hold for the car? ie is it owned outright, company owners or car loan?
7. Any another liablilty? ie Personal loan, Store card?
8. Lastly what state is the property your planing on buying located?( for FHOG purpose…)Regards
MichaelMick C | Shape Home Loans
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Ferdinand- i did quick calculation – yup your fine with serviceability** at 10k CC – Lowering your cc limit is a good thing in general but also may not the the best thing if your JUST abt to apply for a loan- The lender will ask for 3 month CC statements…and if they see different limits JUST before you apply for a loan it may not be to your advantage so carefully planning is required and applying to the right lender is a must.
No LMI with 15% genuine saving and 1 year with current employer is fine ( 85% LVR)
Regards
Michael** Based on:
– Above information given
– No dependent?
– Solo application ( 1 Adult)
– NO another expense, beside standard living expense
-FHO
– NO another liability
-No hecsMick C | Shape Home Loans
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Swampy30 – with $150k income …and positive geared rental places- you shouldn’t have any problem with borrowing ..BUT to know how much..we really need to know a LOT more details then the above ahha
So i say- either go to the bank and speak to the lending manger or have a chat with an broker. ..their both free so why not?. But i will add that brokers can help you with loan structure and choosing the right product/lender– compared to the banks lending manger who will ONLY recommend their product even if it’s not suitable.
Regards
MichaelMick C | Shape Home Loans
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You can claim the interest for repairs, maintenance and improvements as long as the home was rented out for a “period of time” and remains as your IP.
** im guessing your getting confused about claiming for the cost of the job itself..ie If you JUST bought the place and it was never rented out and you do the above job then you wont be able to claim the tax deduction but you can depreciate the cost over time once it becomes an IP>
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MichaelMick C | Shape Home Loans
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1. No you cant have private contract to say the title is 50% under your name….you be overriding the title deed law…it be the same as selling the home to see ( see above)
2. Depending how close you guys are, she can just give you any $$ that was gained from the property during this time once she does sell it- might be able to get a written contract but im not sure…this will be outside my field of expertise.
3. If your added to the mortgage that’s fine- all your really doing is helping her half her repayments and increasing her surplus funds. This options also comes with it’s disadvantages in that if your sister wants to buy a new place while keeping the above arrangeable, her serviceability will not increase just because your paying for half the mortgage because she is still 100% liable for the home ( solo title deed holder).
Unfortunately there are no one right answers, just a lot of options to choose from.
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MichaelMick C | Shape Home Loans
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The first home saver account is only good if your confident your going to buy a place within 4 years…ie dont do it if your still at uni.- only consider once your in a relatively safe job for at-least 1 year…
Any amount in the first home saver account will go to your super IF:
1. you dont buy within 4 years
2. You cancelRichard is right, Ubank and Dragon are pretty good and owned by the above banks….i think ubank is currently 6.3%???
Skyes- you could buy the place to live in and renovate while your living there ( much easier to organize and do renovation if your living there) then convert to IP …the renovation can not be claimed but can be depreciated each year.
Regards
MichaelMick C | Shape Home Loans
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even if its worth more after a subdivide ( most of the time it does) it won’t have any effect on the serviceability …it will only change the LVR.
If they can only afford to service a loan of $500,000…having your PPOR or IP go up in value…it doesn’t mean you gained any extra income to increase serviceability
Regards
MichaelMick C | Shape Home Loans
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Cashbond – pretty much a standard Bond…but there are many different types.-
Learnings- Yes cashbond are fine…but it depends which type of cashbond you hold and is it an Australian cashbond ?
Just a few points;1. ” upto 20k private finance “?? so are you getting a loan for a private fund for the subdivision??? – why dont you just borrow it from the bank your wanting to apply this 2nd IP
2. Your situation sounds a bit complex to solve correctly over a forum- you have a lot of “variables” and “unknown” happening.
3. Your back up plan will only work if this is an ACTIVE ABN for 2 years + you have a accountants letter as declaration ( highly unlikely any accountant will supply this letter) OR an Business active statement from the ATO ( unlikely) OR 6 month trading statements ( Unlikely)
I guess what im trying to get at is …your best to go for a full doc PAYG application because on your bank statements the lender will see regular “income” from your work and this will cause alarm bells…*ding ding ding * game over buddy.
4. GF – no chance for serviceability guarantor…can only be a co-borrower.
5. ” duck and weave between lenders to get it accepted. ” – Your playing a dangerous game, a lot of lenders will automatically shut you out if the purpose is for construction.
My advice as an broker- be upfront…yes we can be creative in the way we structure your loan, choose your lender, choose the product..but at the end of the day if you have to resort of serviceability guarantor, Private funds, cashbond and Low-doc self employed JUST to get this loan over the line….is it really worth it???
So i say, sit down with your broker and accountant and work something out- you never know it’s probably not as bad as you think.
I clearly remember a client who came to us 15 month ago and requested a private non-conforming lender outright ( rate of 14% !!!!) because she thought her situation was to complex for the banks and she was close to settlement.. We end up placing the loan to CBA and it was approved within 2 weeks.You never know if you never ask. Guessing and presuming is a dangerous game and can cost your thousands.
Regards
MichaelMick C | Shape Home Loans
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1. You will NOT be able to get the FHOG with ANY states sorry to say – one of their condition can not be related purchase.
2. 50% stamp duty payable –
3. She will have to pay “capital gain tax”The question is…BESIDE wanting extra “expendable income ” do you guys have any other reason to go ahead with this split??? because in the short term you will be thousands of dollars behind.
If she wants expendable income then really you can be added to a mortgage docs as a guarantor ( not all lenders allow) BUT not as a title deed holder.
Regards
MichaelMick C | Shape Home Loans
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NSW- i’ll keep this post short- since you probably have plenty of information to process already ( 33 post wow!)
– Bankwest Prem home Loan is a good completive product and for your needs PPOR- > IP it’s perfect
– They are slow for self employed loans i find…for a straight 80% LVR, PAYG you wont have a lot of problems.
– There pre-approval is useless…make sure it goes to unconditional approval – so get all the Docs to your broker quicklyLastly welcome to the world of property investing
Regards
MichaelMick C | Shape Home Loans
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Forgot to add: Depending on what your purpose is: ie build and sell? or rent out- it’s an good idea to speak to your tax accountant first if your planning on adopting the build and sell strategy as CGT would be potential be in play and if done correctly you could save thousands on CGT
Lastly either way make sure the new loan you apply for is a SPLIT loan- DO NOT add it to your existing PPOR loan – very important loan structure if you want to claim the full tax deductions.
Regards
MichaelMick C | Shape Home Loans
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Hi, welcome to the exciting world of development!
You got two options:
1. Subdivide first
*If you do subdivide the bank will issue a new loan for each subdivision, ie if you have 3 titles = 3 separate mortgage/loans, all done within it’s own merits ( own LVR, valuation )
* If you go down this way, you can stay with the same lender or If you choose to shop around and find a new lender; you can potential have 2 new lenders each securing one portion of the land (one title each etc) —
* in regards to the construction; for the empty land- you would apply for a vacant land + construction – depending on which lender this is allowed up to 90-95% of the valuation/market value LVR2. Build first then subdivide
* You would have only ONE title- so only ONE lender securing property + the construction cost
* This option provides less flexibility ( explained below)
* Apply for a new loan ( some banks allow a split loan into your existing) ; the new loan would be a construction loan.
For both options, the bank will be fine with the construction as long as you afford to service the loan your after and you must have all council approval, fixed price quotes and plans set and ready before they will consider your loan.I would say option 1, is a far more superior option in term of protection, since im guessing this is your first development project. Reason i say that is; option 1 allows you to change lenders and find new competitive rate for EACH land ( so if you had problem with your current lender you can simple change it over) . Lastly if you gotten your self into some unforeseen financial problem; you can simply place one of the construction on hold or simply sell one of the land off to offset any short falls.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
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$6,500 as entry cost, they buy the land to lower stamp duty then make you buy it off them?? ( stamp duty will still be payable at the market rate or selling rate, which ever is higher!)
It sounds like a scam….
Click on contact page, and if it’s an Nigeria address RUN ahahahMy advice, if you have to “question ” how a company works or question its legitimacy- then don’t bother! save the tears/heartache and move on.
Regards
MichaelMick C | Shape Home Loans
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Hi,
I’m slightly confused…are we talking about a standard credit card here? or some sort of LOC ( line of credit?)
From your post it sounds like your not your friend is not an Australian, am i right? sounds like a US loan….Regards
MichaelMick C | Shape Home Loans
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ohh im pretty sure the residex report’s data is the same as RPdata.
If it’s any help, i have Pricefinder….the data sources is different.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
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Send Richard the email, the residex reports are sometimes quite useful.
My top tip would be to speak to shop owners and the neighbours- as local knowledge is very important.
Drop by the local coffee shop and have a chat with the shop owner – Free and no harm done.Regards
MichaelMick C | Shape Home Loans
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I done something similar – for a Unit i have in the CBD
Converted a laundry into a room, and the bathroom ( only bathroom by the way) into a combine bathroom and laundry.
Strata approval with DA – $900 ( in your case, since it;s a house…im guessing you wont need a DA or approval etc – unless it’s a kitche your adding in )
Cost of renovations- $4,000 – since i had pipes and water running in the bathroom already, it was a simple process of adding a spot for the laundry only. The res of the cost was for the new bedroom— in the end, extra $160 per week in rent for the 2nd room + tax benefit from the renovations and depreciation.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
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