Hi all,
I’m very interested in investing in property and keen to learn how to create wealth for my life and family. Recently, I’ve bought my 1st PPOR (about last month) and the LVR is 80%.
My financial situation is excellent (plenty of cash). I used up all my “borrowing power” from the bank in order to get my 1st property (PPOR). I discuss to my financial adviser, and she told me to borrow the money from the financial institution using Low Doc Loan, using Interest Only payment.
The only problem that I face with Low Doc Loan is the deposit is at least 20%. If I keep doing that, my cash will be gone very quickly. I want to pay the 10% deposit, with still using Low Doc loan. Is there any (better) option that is available for me ? Is there any advise for me ??
One more thing, is that possible to get a fixed rate for Low Doc Loan ?? Your response will be much appreciated.
Cheers,
Hi Cutegirl
Have you considered New Zealand, you will still need a 20% deposit but you will be able to buy positive cashflow in a main city. It will also allow you to have a separate income stream in New Zealand to Australia. The problem in Australia at present is that because all property is negatively geared the banks look at that as a loss. They will only lend so much on that basis. In New Zealand the deal will stack on the deposit and the positive cashflow
Nigel Kibel
http://www.propertyknowhow.com.au
Australian and New Zealand Buyers advocate
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Hi Cutegirl,
Have you considered renting out the property you have just purchased or renting part of it to gain extra income. This may increase your servicability enough to change your situation.
Cheers.
Don Nicolussi | Mortgage Broker - Home Loan Warehouse
http://homeloanwarehouse.com.au
Email Me | Phone Me"I think of finance as a technology, a way of getting things done." Robert Shiller
There are low doc loans with higher LVRs – up to 95%. But the interest rates can be high – very high on some. So it is not the ideal loan to get.
Rates can be fixed on most low doc loans. The fixed rates can also be rather high on these.
Are you sure you cannot obtain a ‘normal’ loan? When factoring in rent from the new purchase, you may qualify.
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
Hello Cutegirl,
You can get 90% and 95%lvr low doc loans, but watch out for higher interest rates…
Pete
My financial situation is excellent (plenty of cash).I’m very interested in investing in property and keen to learn how to create wealth for my life and family.Would you be satisfied with a an investment for that cash which returns a guaranteed 7% or better pa compounding daily?
Foundation… I’m intrigued… spill the beans please… Nobleone. [biggrin]
“Making mistakes is just another another tool for learning.”
Use that cash to reduce the non-deductible interest payments on your PPOR. Principle payment or offset account is equally effective. You’d be hard pressed to find a better return from residential property investing at this point in time (IMHO).
Cheers, F.[cowboy2]Could always consider a 2nd mortgage cash back and receive circa 14% PA on your investment clients are starting investing with around $14000 cash only.
Cheers Richard
richard at castlewhite.com.au
Email me for details of our Qld wrap CD which gives you a full Installment Contract.Richard Taylor | Australia's leading private lender
Thank’s for the response.
I’ve still have several question regarding to the answer.
To Terryw:
Rates can be fixed on most low doc loans. The fixed rates can also be rather high on these.
Are you sure you cannot obtain a ‘normal’ loan? When factoring in rent from the new purchase, you may qualify.Do you mean I can get the normal loan from the bank, not using Low Doc, but using standard normal loan from my work ?? If so, will they need to refinance my loan for my PPOR again ??
To foundation:
Use that cash to reduce the non-deductible interest payments on your PPOR. Principle payment or offset account is equally effective. You’d be hard pressed to find a better return from residential property investing at this point in time (IMHO).I think it’s a good idea to reduce the interest for my PPOR, and use the equity from my PPOR, in order to get the loan for the investment property. Is that what you mean ?? If not, is there any other option for me ??
To Qlds007:
Could always consider a 2nd mortgage cash back and receive circa 14% PA on your investment clients are starting investing with around $14000 cash only.I don’t really understand about this idea, to be honest. What do you mean by 2nd mortgage cash back ?? How do I receive 14% pa and only use $14,000 for the deposit ?? I really want to know and learn about this, because it is very interesting.
Agree with foundation. get back to basics and reduce that loan on your ppor. the build up of equity from this and cg over time will put you in a great position to start building that portfolio. good luck.
I think it’s a good idea to reduce the interest for my PPOR, and use the equity from my PPOR.Yes, if the value of your PPOR increases you could consider ‘accessing some equity’ to buy an IP, but if house prices remain flat or fall, you’re probably better off simply repaying that PPOR loan.
Cheers, F.[cowboy2]Originally posted by cutegirl:To Terryw:
Rates can be fixed on most low doc loans. The fixed rates can also be rather high on these.
Are you sure you cannot obtain a ‘normal’ loan? When factoring in rent from the new purchase, you may qualify.Do you mean I can get the normal loan from the bank, not using Low Doc, but using standard normal loan from my work ?? If so, will they need to refinance my loan for my PPOR again ??
You may be able to get a normal loan from the same bank or a different bank, depending on your income. If you don’t have deposit and go to a different bank, then you may have to refinance your property (unless you could increase the loan and withraw some equity).
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
cute, why do you not contact one of the many mortgage brokers here and give them your figures so they can advise you properly. Everything you are being told is not worth anything without the figures. You might need a low doc or you might not. Who can tell without the numbers???
The Mortgage Adviser
http://www.themortgageadviser.com.au
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