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These guys are quite good:
http://www.klmaccountants.com.au
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They are cross securitising you and taking you to the cleaners. I would move onto another banker or find a decent broker.
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Re LMI – whatever you have paid in LMI you can use this as credits so make the banker aware of this. This is really important when it comes to an equity draw.
I prefer a std variable loan with a linked offset (separate account) unless im using macquarie bank.
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Did you pay LMI with your PPOR purchase? Is the valuation a bank ordered valuation or your valuation?
You can have separate loan accounts without the need of a LOC. Some will suggest LOC and some will suggested a standard variable with a linked offset.
Good idea to have all income income the rent, salary, etc going into offset against the PPOR.
High level plan looks ok.
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Interesting – thank guys.
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If it were in NSW I could give you some guidance but vic is out of scope for me.
If I were you I would talk to Oscar from here www.completedevelopment.com.au
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What are the disadvantages with using online packs, if any,?
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What is the state and what is the council?
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I have sent you a PM with the details – its 2 x 3 storey dwellings.
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I recently had a client get DA for 2 detached dwellings on a 280sqm block in eastern suburbs syd. She will clear at least $800 profit. Purchase price of $1.5mil and DA fees of $150k.
Good town planner and understanding of planning requirements is a must.
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Development.
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Contact a town planner – like this guy:
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You have 2 options for 105% finance (5% is for the stamp duty and additional charges like legals).
Option 1 – draw upon the equity from your current property and use this as a deposit for the new purchase. You purchase the unit in August and I think property prices have since increased so you may be able to draw upon some equity there.
Option 2 – Go with the Adelaide Bank product where they give a $20,000 credit card with your mortgage which can be used to pay for the stamp duty and legals. You do need to have good servicing for this product though.
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You do not need to cross securitise. Either pay for the offset or just have the loan sitting in redraw. Just make sure its a separate loan account and you are not contaminating deductible loans.
There is a misconception that some banks give better valuation or some valuation companies give better vals than others. This is incorrect. Valuations come down to the specific valuer of that organization doing the valuation for that specific lender.
Here is how I would approach it – order a modelled estimate via ANZ (system chooses this but theyare quite common) and concurrently order a few upfront valuations with a few of the other lenders. Just make sure that they are different valuers. Then assess you will give you the highest amount of equity. This should dictate what you do to a certain extend.
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jwareham1985 wrote:Loving the information guys, keep it coming.Shahin you suggested earlier that I should sit down with someone to have a more in depth chat to about this, Is there anyone that you guys can suggest me to sit down and have a more in depth chat to that's based in Melbourne? Preferably for a cheap fee rather than too expensive?
Most mortgage brokers don't charge – get someone independent and that doesn't have any hidden agendas (like any profession) and someone that thinks long term rather than transactional.
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Depends on the age and servicing but more so the lender. Most lenders will look at your age and servicing and then determine that you need to start paying the principle down.
In another scenario – if the loan is an investment loan and its with Westpac then they have a no age policy so as long as you can service the loan you do not need to pay the principle down. Their thought process is that as this is not the applicant's PPOR and its an IP – they can sell the property anytime thus no need to go on P and I repayments.
If after 10 years time the property goes into negative equity (then you have bigger problems) but seriously the bank doesn't look at it that way. It comes down to age and servicing.
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Ok you will need a minimum deposit of $82,000 plus legals so lets say $84,000 in order to keep the loan at 80%.
If the IP is worth $425k then you have $66k in equity there so you just need a further $18k.
I would order the upfront val ASAP. NAB does this. Do this before submitting any applications.
Also you have already been cross securitised by the looks of it so I would clean that up sooner than later.
Also as you have already paid LMI – you will have this as credit.
It all sounds complicated but its actually quite simple.
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Some lenders like Suncorp, St George and Macquarie allows you to easy create sub accounts.
If we are talking about a loan amount of $595k then Westpac will do 4.97% (plus $1,000 cashback), CBA will do 4.95%, Homeside (NAB) will do 4.94%.
Second tiers lenders will even go lower but again don't focus on rate – focus on who will give you the most equity.
If you are with ANZ try doing a modelled val first.
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Rate is good. Can you do better? Yes. Should you move because you can get a better rate? No.
But you should consider moving if another lender gives you the same deal or better deal plus and more importantly a stronger valuation (in turn more equity).
I guess the question is why pay LMI if you don't need to?
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TheNewGuy wrote:Thanks. Can you provide a bit more detail about how I can go less than 90% by using equity? I'm using total loan / total value and getting around 80% (832/1045), so I assumed that I couldn't go any higher, is this not the case?I'll remember to aim for 88%, in fact I'll ask for a LMI cost for both just to be sure.
What is the purchase price and what is the State?
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