Hi NJ

No. LMI policies are no necessarily the same with all lenders. It depends on the lenders policies and what risks they want to insurer.

Yes, you will probably have to pay LMI again because the lender would need to take out a new policy.

Yes, lenders will reduce the LVR if loan sizes start getting over $400k/$500k (or $700k in your case).…[Read more]

Hi Rob

Alana is correct. Not all lenders offer a “rate lock” facility. If your lender does not offer this then there’s not much you can do.

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

Hi Maggie

Well done. ANZ LOC is very good. You can’t get a better rate for a LOC on the market (anywhere). Only St George and perhaps NAB will match the rate but your total borrowings have to be over $500,000. So it’s a good choice.

I would suggest taking advantage of the BreakFree package (ANZ professional package). It entitles you up to 5 m…[Read more]

Perhaps. You could always give it a go.

However, the banks do make some savings by dealing with brokers. They save money on:

– Advertising.
– Sales staff.
– Admin staff (as we put the application together and in same instances enter the client’s details online).
– Brokers allow the smaller lenders into the market without them having to set up a…[Read more]

Hi

4 units on one title can be an issue with some lenders. NAB will still do it at 80% and ANZ will do it at 70%.

The bigger lenders (i.e. Big 4) have a better capacity to lend in smaller areas (because the smaller lenders have to mortgage insurer all loans regardless of LVR). CBA will lend 80% just about anywhere (but they will not do 4 units…[Read more]

Hi Brizza

You have asked a very good question (and one that many people are probably wondering about).

I think my article which will appear in API magazine in Oct/Nov issue will answer your question. It’s titled Unlimited Finance and explains how banks assess loans and how the properties you purchase affect your borrowing capacity.

Its 2,000…[Read more]

Don’t have much time but feel I have to respond.

1. Most IO periods are for 5 years. ANZ offers 10 years and St George offers 15. An indefinite IO period = LOC.

2. LOC are often a waste of money – too expensive. Normally only 1 out of 10 people that think they need a LOC actually do. You are better off (from a cost perspective) to use an offset…[Read more]

Hi Marty

It is a difficult question. In my opinion, it’s too hard to forecast anymore than 3 months ahead (a lot can change in 3 months). At this stage I can’t see rates moving at all for the next few months.

I think the banks became a bit optimistic and reduced fixed rates. Now that they have sobered up they are readjusting their outlooks.

But…[Read more]

That’s a good point Del. There is a point where investors should buy insurance (i.e. fixed rate) to manage interest rate exposure/risk. This is something I definitely support and recommend.

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

Hi Ange & Doug

Welcome to the forum.

If serviceability is an issue to rental yield is your answer. If properties are financed at 80% then you need a yield in excess of 8.8% for the property not to affect your borrowing capacity. If financed at 100% then yield needs to be over 11% (pretty hard but doable).

I have an article being published in…[Read more]

Hi M

Thanks for the question. It’s a good one.

I only had access to interest rate data for the last 10 years so my assessment does not take into account full economic cycles. However, if the data get too old then it starts to become irrelevant. For example, it wasn’t until the mid eighties (I think) when Australia started to “manage” the interes…[Read more]

My goal is to have the luxury to spend as much time as I want with my wife and kids (when my wife and I decide to have them).

Note the wording… as much time as “I” want!!! I say this on the basis that it is possible to tell the kids to go away when you have had enough. Is that possible?

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

In my opinion:

1. Repair.
2. No. It is not an income producing asset at the time the repair is being made.

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

Hi Terry

I have had a similar issue with one of our client’s once. The bank did not register their mortgage! I think Davo’s right… things slip though the cracks (which is really surprising since the banks are always so savvy, efficient and professional… NOT!).

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

Instead of talking about gross and net lets just talk about taxable income.

PAYG
Gross salary – work related deductions = taxable income. Let say this is $60k.

Property
Rental – allowable deductions = taxable income. Lets say this is $8K.

Therefore your taxable income is $68k. The tax payable on this is (excluding Medicare):

1st $6,000 =…[Read more]

Hwd007

Ok @ 80% you can borrow $10,000. You can use this to pay for 20% plus costs. Therefore, purchase $40,000 of property (or $42,000 including costs).

@85% you can borrow $45,000. You can use this to pay for 20% plus costs. Therefore, purchase $180,000 of property (or $189,000 including costs). (financing new purchase at 85% as well)

@90%…[Read more]

I get NII students ringing me up now and then asking questions about finance (mezzanine and the like). Often they are very misinformed. I really feel sorry for these people. They have been taken advantage of and it is likely the misinformation will do more harm than good. Furthermore they don’t even know they have been taken advantage of.

I’m…[Read more]

Hi Everyone

Just to let you know – Watch out for my article on Unlimited Finance. It will be published in Oct/Nov Australian Property Investor magazine (released early Oct).

I hope it answers everyone’s questions.

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

Hi ArchiZEN

A couple of comments for you to consider:

1. Consider not using a line of credit. Offset or basic loans generally let you do that same things at a lower cost. Many people think they need a line of credit but they don’t.

2. Consider using another lender. CBA does not discount its line of credit as much as other banks. E.g. ANZ’s line…[Read more]

What you are talking about is referred to as ‘capitalising interest’.

Generally, you can capitalise interest only on line of credit product (but not all banks allow this). However, you are not entitled to a tax deduction for the interest charged on capitalised interest (e.g. interest on the additional $50,000 p.a.). This is the subject of an…[Read more]