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  • Thomasp, I borrowed 80% from BankWest. The info I had was that the LVR is limited for expats because the lenders cannot get LMI.

  • Yes, I took out a new loan from an Aus bank earlier this year. All the documents for signature were mailed/couriered back and forth for my signature, I never returned to Aus. I used a broker.

  • Det,

    Interest rate rises will be a problem for you if:
    – Your loan payments rise beyond your means forcing you to sell, or
    – High interest payments erode the profitability of your investment, or
    – High interest rates lower the value of your property when you want to sell.
    One way to manage the first two points would be to fix your interest…[Read more]

  • leigh j

    Deposit $200000 x 20% = $40000
    Approximate costs $200000 x 6% = $12000

    $52000 ought to do it.

    Talk to a mortgage broker, it’s free, for advice on borrowing money o/seas! I have had no problems so far, but haven’t tried to borrow more than 80% either.

    Save hard, don’t rush into making an investment decision. The latest boom appears to…[Read more]

  • Great thread foundation…

    From an investor’s point of view wouldn’t you say that population growth is still an important driver for capital gains? Sure, you show that demand is continually being met by new supply so it may be reasonable to conclude that it is unlikely for median prices over a whole city to be impacted. But if the population…[Read more]

  • Some really interesting discussion in this thread and foundation’s Myth Buster series.

    Imagine the Comsec prediction is correct and real house prices will fall back to the historical norm compared to wages over the next two decades (47% decline in real terms!). How will the nature of the “median house” change over this time? What is the likely…[Read more]

  • With $70,000…

    If you pay down debt at say 7% interest you make a guaranteed $4,900 per year.

    Based on your given assumptions the shares don’t look attractive enough given that these returns are *not* guaranteed. BUT, what you really need to do (IMHO) is look at the range of possibilities – what is the outcome in the worst-case scenario…[Read more]

  • Yack, ok…

    In 2004:
    – My first child was born,
    – My wife became a SAHM,
    – I started a new job,
    – We moved to Malaysia,
    – And rented out our house,
    – Completed a 6 month project in China,
    – Got a promotion,
    – Paid $30,000 off our home loan.

    Plans for 2005:
    – Add $65,000 to net worth through new share investments and/or debt reduction,
    – Become…[Read more]

  • You have to take into account additional closing costs (stamp duty, solicitors fees, bank loan fees and LMI, etc.) as well as the deposit. Stamp duty is the big one and is different from state-to-state. You can find calculators on the web to estimate these costs for you (major bank websites?), for my (one) property in VIC the total was around…[Read more]

  • I’ve seen a number of these strata storage units advertised. My reservations, based on the ones I saw, were:
    – You’re restricted to one possible tenant (the storage operator) on a long-term lease leaving little possibility of improving rental returns. (Would want to take a very close look at the financial health of the operating company.)
    – The…[Read more]

  • Thanks for the replies! Your booklet was most helpful Julia.

  • thanks richmond, I realise that, but if your home is the security doesn’t that make it a loan for the purpose of buying a home? who determines what the money has been used for? is it as simple as redrawing on your home loan, investing the money elsewhere and deducting the interest on your tax return, or do you have to change your financing? I…[Read more]

  • Maybe this is a dumb question. But does Michael have to beat 6.5% (the interest rate on his mortgage) or 12.6% (the rate pre-tax assuming he’s in the top tax bracket and paying Medicare levy) given that money borrowed to purchase his PPOR is not tax-deductible?

    Are you saying he can borrow money to buy fixed interest securities (f/ Eurofinance)…[Read more]

  • Michael,

    Thanks for asking this question because my wife and I are in a similar position to you.

    We spoke to a financial adviser at the start of the year who advised us to pay off the home loan first. The “guaranteed” after tax benefit (given that debt is not tax-deductible) of paying off the mortgage is quite high (interest rate / marginal tax…[Read more]

  • It amazes, even frightens, me how much debt first home buyers in particular and young Australians in general are willing to take on.

    My wife and I decided to buy our first home 2.5 years ago. We were renting in inner-suburban Melbourne at the time but despite being very fortunate to have salary income comfortably in the top quartile for…[Read more]


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