Forum Replies Created
Try ordering a few different types of valuation across a few lenders. Most likely there will be a bit of difference in the valuation amount quoted by each valuer.
You may find that another bank will give you more equity than your current bank.
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Just finished my development in Pymble so need to offload that and move onto the next development – I have eyed a few places but need to make the time to act rather than procrastinate.
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
It doesn't matter if its interest only or not. Most banks offer free upfront valuations. Speak to your banker or broker and order an upfront valuations first to see how much equity you have. Its quick and its free.
Equity is calculated on the between 80% to 90% of the value. So lets say the property is worth $500,000 and your current loan against the property is $300,000. At 80% lend (which is $400,000) you will have $100,000 in equity ($400,000 minus current loan limit of $300,000). At 90% lend you have $150,000 in equity ($450,000 minus $300,000) but because the LVR is above 80% – you will be paying LMI which can be added to the loan (capitalised).
In summary – start with the upfront valuation against all the properties to see what sort of equity you have. You may need to tap into a little equity from each property.
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Why not just go with a lender that has a no valuation policy?
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Depends on where you are building. A GF in Mosman will add 110% in value (value defined as the amount that the valuation will increaseby) whereas a GF in Wilmot will add 60% in value. This is a time where an upfront valuation will come in handy.
Oversupply of GF's in far western sydney is a massive concern.
Where exactly are you building?
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Have you considered the land releases in schofields?
Western Sydney is a massive area – how west are you willing to go?
$15k isn't going to take you far so jumping on the FHOG wagon might be required.
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
I have used service seeking for my current development in sydney and generally found it excellent. Some jobs attract a lot of people (like tiling, concreting, timber floor board installation, etc) and some don't (fencing, etc). I recommend you still do your due diligence. I also found that it was hard for them to give a quote over the phone/internet so they really need to come out and see the job.
Good luck!
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Creasy23 wrote:My questions are:- what is the optimum amount you should have in your super before looking into this?
- is around $10K the average cost of setting up a SMSF? ($7K to set up and $3K for incidentals)
- if we were looking to purchase a property for around $320K, I am thinking $90K be sufficient to just cover these costs? (set up, 20% deposit, stamp (NSW), closing costs etc) Are there any major expenses we are missing from this equation?
- If the property is positively geared, are you able to set up an offset account on a loan in a SMSF so that any rental income and future super contributions are able to sit against the mortgage?
- If over time that property is paid off by rental and additional super, are you able to sell this property and using this cash purchase a property of higher value? (we are both 30 so still have at least 30 years in the workplace
1. There is no hard or fact rule to how much you need. You need approx 25% of the purchase price in order to cover the 20% deposit and stamp duty charges.
2. Cost to set up (Superfund Trust, Bare/Purchasing Trust, Corporate Trustees) should be around the $4k-$5k mark and then you need to factor in annual auditing fees of around $1k. If you are taking out a loan then the upfront fees are a little more expensive than your traditional loans. The upfront fees will be dependent on the lender and you are looking at approx $2k.
3. If you are purchasing a property for $320,000 then you will require a minimum deposit of $74,500 plus legals and lender upfront fees so plus another $4k to cover those fees.
4. Unlike traditional lenders – only 3 SMSF lenders offer Offset accounts (Dragon, The Rock and AMP). so wary before you randomly submit an application. Arguably I think that an Offset inside an SMSF is more powerful than an Offset outside an SMSF due to the reason you have noted in your email.
SMSF loans are easy peasy but please don't try it at home if its your first time.
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
In that case your only option is to go with a specialised lender (i.e Pepper) but you will be charged an arm and a leg for establishment fees, rates, etc. You may need to go down this path and then refinance at a later stage.
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
There are a lot of policies that puzzle me like Homeside's 6% cap on rental but this is one of the policies that definitely make sense.
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
CBA was running at 5 days but now its around 3 days because they worked over the weekend.
Is your total borrowings with CBA over $1mil because it will go to LMI and that will create blockages.
Other than that I suspect the broker (sorry I don't want to blame the broker) may have forgotten to send the necessary information the first time around which causes assessors to question things and once that happens then they start asking for further information/documentation which they may have not asked if the application was structured correctly at the time of submission.
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Pretty straight forward but you will be up for stamping charges when you transfer the title to yourself. Have you factored this in?
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
What exactly is the default? i.e how much, lender default or telco default? Did you go bankrupt? What is the LVR? Also are you married? If so can the loan service under your partner's name?
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Do you have plans? if so are they DA plans or CC plans? Are you factoring in site costs? if so do you know much excavation, etc is involved? Do you have DA? If so what are the additional conditions of the DA? These will also sway the development costs. Also have you determined the council contribution costs? Have you considered the DA, CC and OC costs?
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
I dare say that a block in hornsby would be sitting on a cliff or will be extremely steep. If this is the case – then your biggest issue will be rock excavation. This is going to cost lots. You can start by getting some ideas from an architect and then discussing this with a builder to determine approx cost.
The only variable here is the council. What if they ask you to excavate as part of the DA?
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
The valuer spoke to the broker? Hmmm that doesn't sound right?
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Do your own research and don't just follow someone elses. Your first purchase is oh so important because it will either anchor you or set up very well for subsequent purchases.
This forum is full of useful information. Also set yourself up with a network of like minded people and see what has and hasn't worked for them.
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Bankwest shouldn't have an issue financing this unless there is a specific issue.
What have they advised you?
Are you dealing with them direct or via a broker?
Also have they done the valuation? Do you have the valuation report.
You shouldn't just apply with another lender because at 95% LVR you don't want multiple hits on your credit file.
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
You need to engage a town planner – try Aaron:
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Try Wow Advisers based in QLD.
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
