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The trouble is, banks do not like you onselling something htey have a mortgage over via an installment contract.
Also banks will generally only go on what they consider market rent. This is generally calculated about 5% of the purchase price per year. You can argue that you will be getting more, but have to have some good reasons.
However, for future borrowings, once you settle on the property they will assess it at whatever rent you are actually getting.
Terryw
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Can you get out of the contract?
I had a unit off the plan in Melbourne, prices hadn’t gone up like i expected and i probably paid too much for it in the first place. The construction had gone over the sunset clause, so I just cancelled the contract. I was just up for the price of the deposit bond, and some conveyancing costs.
Terryw
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Another potential problem is that someone will no doubt want to pull out at some stage. people’s circumstances change. Not such a big problem, other can buy them out. You just have to plan up front, need to work out a way to determine the price the remianing people will pay. It could be done on a market valuation, or the average of 3 valuations etc.
Terryw
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Boothy
Are you planning, or is there any chance you will come back to live in your house in Sydney?
Terryw
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Sounds good, but may eat into your serviceability. If there are more than one person ont title each may be deemed to be responsible for the whole repayments for this loan when applying for future loans.
Does that make sense?
eg if 5 people on title and loan, with min repayments $1000/month. Each person’s share is only $200, but if they others don’t pay you will have to, so banks will deem you to be responsible for the whole $1000.Terryw
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Try Wide Bay Capricorn. When do you have to settle?
Terryw
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Mate you are keen. It may be a bit too soon. Do you think the property is worth much more now?
You could do it by going for high lvrs and paying mortgage insurance. It would also depend on your income etc.
Terryw
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Fixed rates have dropped (probably) since you took out the loans. Therefore will have probably have to pay the bank a large penalty for getting out. May not be worth it. (I recently paid more than $3000 exit fee on one of my 5 year fixed loans).
It would hurt to ask your lender, if you could keep the loan in place and just change it to IO. they may do it with no change. Or you may even end up saving if you break the loan and then go for a lower rate.
Terryw
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Agent
I am surprised too. I don’t think that will be the case for the average investor!
Terryw
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John
You could get a pre-approval, but these only last a short time. usually max 3 months, and then they will want updated details such as payslips etc.
If you get a LOC, you could use that to live on, and for deposits. You could possibly use low doc loans, but some lenders require you to be self employed for a min 2 years. There are some that don’t, but rates are a bit higher – around 6.95%. Get an ABN now!
I know the feeling, you are sort of stuck aren’t you. Don’t ahve time to make money! What I did was to get as many wraps as I could which gave me income to live on when I quit work to set up as a broker.
G-man007
Sounds good in theory, but if they are your businesses or companies or trusts, banks will probably just deem you to be self employed. It may work, I’ll have to think about this one.Terryw
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I agree. Definetly go IO on any future IP. And I would change teh existing ones to IO as well – as long as the fees in doing so are too much. And I hope your mortgage offset account is set up against the PPOR loan.
Terryw
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Kirby
You can look up the title of the house to find the owners. It can be done on the web and should cost less than $10. Look for the Land Titles Office in your state.
You could just pay them the deposit, but You should probably have your deposit held in their solicitors trust account, just incase things go wrong.
Terryw
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Suart
Good to see what you look like.
Terryw
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Wild nothing
I have found that many people actually buy property and then get the finance.
If you send me all of your figures (all income, debt, credit cards etc), I can give you a rough idea of what you can borrow.
Terryw
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I think with a corporate trustee, you have to have separate accounts. Probably a business account, (as the banks want you charge you extra fees). With an individual trustee, you can just have an account in the persons name, ie normal savings account.
Terryw
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Wild
I wouldn’t beleive anything a real estate agent says.
Your broker should be able to tell you how much you can borrow.
If you get your subject to finance clause worded correctly, its water tight. Worded incorrectly could cost your dearly.
Terryw
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Refinancing shouldn’t take that long (max a month?). Once that is done a pre approval should only be 2 days. Your broker could also arrange a pre approval at the same time. At the very least he/she should be able to tell you if you qualify for another loan and how much you could borrow.
You can also make offers subject to finance.
Terryw
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Hi Maveric
As the courses do not relate to current income, I beleive they are probably not deductible. Check with an accountant.
Terryw
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Kristoffer
I haven’t really considered buying a franchise, but have heard that Westpac will lend 100% for the top performing francises such as McDonalds, so it may be worth giving them a call.
Terryw
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Fullout
Yes you can do that, banks will lend you the money as a LOC. I don’t know what they would think if you told them it was for living expenses tho! Most just say for ‘investment purposes’.
When buying a property banks insist on a valuation to protect themselves. I could sell you a $100,000 property for $200,000, and if the bank lent you $150,000 and you defaulted they would oly have an asset worth $100,000. ie $50,000 shortfall.
Some banks will not do a valuation if it is under 80% LVR and under a certain amount. Otherwise a valuation is usually conducted,
Terryw
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