Hi forumites.
I have been alerted that there is no cash down finance i thought this was the evils of marketing however, the person that told me of this way of finance said this was no marketing scheme its quite a normal way of finance…
PLEASE someone explain the ins and outs so to speak what are the conditions and pre requisites to obtain the loan…???
Any light
Regards Josh
[email protected]Hi Josh,
In general, to be able to do this, you need :
– a deposit of 20% in cash or equity from your other property and
– enough income to service your loan.We borrowed 105% to buy our last IP with 99% in my hubby’s name. We had money for its deposit but chose to use this money to pay off another IP in my name. The reason is my husband income is in the top tax bracket so he can claim more back in tax.
There is nothing wrong in doing so, just make sure you can service that loan.
Regards
Huey
–
Hey Josh
I think there are also a couple of products out there (St George being one of them?) that offer 100% loans. Haven’t looked into it, so don’t know the details.
Cheers
MelMel,
Whilst these are called 100% loans they have exxy fees and the reality is you still need a saved 3% deposit to cover these fees. Rates are higher too.
Huey is spot on. If you have the equity then you can easily borrow 100% plus costs at cheap rates.
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
That’s just typical of the banks!! Not that I’m planning on using the loans, but why can’t they call them like they are, rather than making them sound great, and get people’s hopes up?
Although I seriously wonder if you should be buying a house if you haven’t got any money saved up at all.
Cheers
MelMel,
Probably a great strategy in a quickly rising market.
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Um, everyone, there is a 100% loan where you don’t have to have the 3% saved, you just need it. And it is actually 2.5% to cover LMI, but you will need to cover other fees, like Stamp duty etc..
With this lender you can get the funds to cover LMI and fees from any where. Gift, personal loan, loan on your car etc..
In regards to getting peoples hopes up, well, these products are 100% home loans, not 105% to cover costs as well. That means, 100% of the purchase price, not 100% finance to purchase a home.
Why should the lenders cover everything?
Picja,
Are you sure it is mortgage insured at that level? I think it might just be a bank fee with them carrying the risk.
Which lender are you referring to?
Cheers
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
100% Loans are also only available if you have immaculate credit history
105% isn’t available with many lenders any more due to mortgage insurers. However the lenders that do offer 100% will only do so if you can demonstrate strong cash flow and solid employment.
So unless you make the big bucks and have played everything straight for sometime, don’t consider a no cash down loan.
If you are interested in finding out your borrowing power or the range of products available in todays Australian market contact us below.
Kind Regards,
David Harrington
Home Loans Quick
1800 191 000
[email protected]Hi, It is possible to get 100% finance and more to cover all costs. This is done through using current equity and then using the same property as security for the IP’s. BUT be carefull. I did this and obtain 2 IP’s, although it suited the purpose at the time it doesn’t suit the purpose now. I got stuck with cross collaterisation of properties and when trying to negotiate to buy more IP’s the LVR of the current IP’s came into play. This saga continues but not here.
C2
“Is it true the more you owe the more you grow until the bank steps in?”
Mortgage hunter, i think PICJA was referring to the Pepper product. Pepper are not usually mortgae insured, but this product is. I think the rate is around 7.6%!
Liberty Finance used to have a 110% lend (on one security) for the high income earners, bu they have withdrawn this product now. Probably due to the anticipated softening of the market.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Agree with C2. A few years back we borrowed all + costs, it wasn’t a good purchase as we got caught up in one of those deals where the property was overvalued at the time and of course it has since had a bearing on purchasing. We have since bought a number of other properties though.
We have just signed contracts to sell the above property and the sale will make our position better for future purchases as the place was -ve.
Had we put down a cash deposit it would have been good.Anna
Hi annaw2, If you were able to purchase other IP’s couldn’t you have refinanced and put more money in to increase the equity whilst lowering the repayments and making it+?
C2
“Is it true the more you owe the more you grow until the bank steps in?”Thanks Terry and apologies to Picja. I thought he was referring to the ST George one!
Everything unusual comes at a price. 7.6% isn’t cheap.
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi,
We bought a property with $200. the bank lent us 110% of the asking price (Bank of Melbourne) which covered the stamp duty , including on the mortgage. All you have to have is another property with free equity. The bank then links both of them as security for the loan. So we ended up with two mortgages, one with our principal home and the other on the investment property. Once The investment property had gone up in value sufficiently so that the percentage equity was over 20%, I unlinked our home from the investment property mortgage.Hi,
We bought a property with $200. the bank lent us 110% of the asking price (Bank of Melbourne) which covered the stamp duty , including on the mortgage. All you have to have is another property with free equity. The bank then links both of them as security for the loan. So we ended up with two mortgages, one with our principal home and the other on the investment property. Once The investment property had gone up in value sufficiently so that the percentage equity was over 20%, I unlinked our home from the investment property mortgage.HI KADAB1,
What costs were involved in releasing the security on your home and who paid for the valuations on the IP to determine the increase in equity? What was the approximate time frame to do this and did you pay any extra towards the IP to increase the equity to do this?
C2
“Is it true the more you owe the more you grow until the bank steps in?”Kadab,
That could very well have been set up as seperate deals from the start.
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
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