Hi
I’m new to property investing and thinking about investing in a New Zealand property but haven’t quite grasped what the pro’s and con’s are of either getting finance from a New Zealand lender with the New Zealand investment property as security or using my own home in Oz as security to pay for the property in NZ. An obvious differences at the moment is the higher interests rates in NZ (> 8.5%) but is there is a clear cut answer to this query? [confused2]
Thanks
Tim
You could use your property here, using a LOC/redraw to pay cash and then get finance later.
I suppose it depends on how much equity you have and how kee you are at investing. If you just use the Aussie equity, it would be wasted in the long run, as you would have an unencumbered property which could be used to make money.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
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I would tend towards borrowing against your property in Australia to buy the one in NZ if there is enough equity. I would not use a LOC.
Reasons for this…
* LOC is usually more expensive and there may be tax issues
* Australian interest rates are lower
* Cancels out any exchange rate risk on your borrowings (not your rent return)If and when you decide to purchase more property in NZ (and you have no more equity in Australia to use), you can use your NZ property to obtain the funds to use as deposit and closing costs on further purchases over there. At least you won’t pay the higher rates until you have to.
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The poster formally known as The Mortgage Adviser
When I grow up, I want to be a Storm Trooper!
Hi Tim,
Welcome to forum. I am agree with Terry better you get 90% loan there ( with LMI ) or 80% ( without LMI ) instead of buying sort of cash there.Cheers
PropertyGuRu [sultan]
Mortgage Consultant
[email protected]
MSN ID: amitash, Yahoo Id: bornguruNZ loan pre approval from OZ in 48 hours,Low Doc from 6.85%,Investment loan 95%+
You get 95% here with LMI and 80% without. Also, you are not treated as an International investor.
What did you mean by “sort of cash there”.
I assume that was ‘short’. Why would he be short of cash if he got the money here and has equity there to use if he needs cash?
_____________________________________________
The poster formally known as The Mortgage Adviser
When I grow up, I want to be a Storm Trooper!
Yes it was sort not short. When person get money in Australia and buy in NZ without getting any finanace it’s cash buy in NZ.
Why not borrow 95% here in australia and and using that money buy multiple property there ( borrowing more there) instead of wasting all your money for one property.
Cheers
PropertyGuRu [sultan]
Mortgage Consultant
[email protected]
MSN ID: amitash, Yahoo Id: bornguruNZ loan pre approval from OZ in 48 hours,Low Doc from 6.85%,Investment loan 95%+
Sorry property, I do not understand what you are getting at.
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The poster formally known as The Mortgage Adviser
When I grow up, I want to be a Storm Trooper!
If Tims got $100k equity in Australia according to me he should get get 80% 90% or 95% loan here (with LOC or other way depends on him) so he will have lets say at 90% of $100k to play with in OZ. now with this $90k why should buy only property in NZ for $90k (ignoring currency exchange etc) when he can borrow $900k theoretically with the help of this $90k in NZ and buy 10 properties
Cheers
PropertyGuRu [sultan]
Mortgage Consultant
[email protected]
MSN ID: amitash, Yahoo Id: bornguruNZ loan pre approval from OZ in 48 hours,Low Doc from 6.85%,Investment loan 95%+
Ok. You just did it a different way to how I outlined it.
It is easier to buy one property there from Australian funds and then use THAT property in NZ to get the depsosits for multiple properties because it will all be inter-country.
_____________________________________________
The poster formally known as The Mortgage Adviser
When I grow up, I want to be a Storm Trooper!
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