Yes Sorry TMA. Didn’t mean to sound like that. I will let Dev tell you where he puts his money.
let me rephrase the other bit. Bankwest will still not lend on valution if it is higher, but for mortgage insurance purposes they can base this on valuation if it is higher than purchase price.
eg. buy a property for $80,000 that values at $100,000. They can lend $76,000 (95% of $80,000) without mortgage insurance.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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That is not 95% LVR. I thought that was what you were talking about. I have done heaps of these for old clients as I am sure many brokers here have also done.
I have done a loan in excess of 150% “LVR” of purchase price!!!!! Woooooohoooooooooooooo!!!!!!!!!!!!!
The client bought off the plan in 2001 for 290k. Valuation in 2003 was 560k. Loan amount was 438k at settlement!
It is also common with advantageous purchase.
All lenders I know will also base LVR on valuation instead of contract price regardless of time limit but may restrict actual lending to contract price if there is no valid reason for the difference in prices.
In devil’s case, it was a completed renovation causing the valuation to include the improvements to the property instead of land only.
The only nice thing BankWest seem to have done here is waive LMI on the minimal amount above 80% LVR. This would be not much more than the cost of the second valuation paid for by the client. What was it, about 0.2% of loan amount?
I still think they are the pits… wait until redraw is needed!
TMA
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First Home Buyer WebsiteOriginally posted by TMA:In devil’s case, it was a completed renovation causing the valuation to include the improvements to the property instead of land only.
Actually, the renovations are STILL nowhere near completion. I did, however have the following done to the place between valuations:
-Second Hand Kitchen $300
-Second Hand Hot Water System $230
-New toilet package $79
-New Vanity Unit $180
-New Shower Screen $360
-New Taps for kitchen & bathroom $140
-Plumber $600
-Electrician $400Total invested: $2289
By the time the renos are completed I would expect to have spent around 7k all up.
The best part about this deal (apart from Bankwest helping with the finance) was that when the bank came back with the low valuation the first time, I went back to the vendor and asked for a discount or I would have to back out of the deal because I would have to put up a bigger deposit. Since the property had been on the market for a while I had already got 15k off the purchase price (275k) but the vendors then offered me a further 5k discount! So for 255k, I figure that the 5k went towards the renovations so in the end the renos will cost me around 2k from my own pocket.
As for your other questions TMA, I have four properties.
Where do I keep my money? I have two different high interest accounts (paying 5.45% and 5.65%) until I decide to buy again…
Dev [kid]
Do you live in a PPOR with money owing?
If so, what is the interest rate on these funds?
TMA
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First Home Buyer WebsiteTMA,
I live in South Yarra in a 5 bedroom house which I signed a lease for $560 per week. I rent out 4 bedrooms and have flatmates paying a total of $560 per week, therefore I do not pay rent and I do not have a PPOR mortgage to pay. The best thing is my dog and two cats dont pay rent here either and my flatmates are happy because its a great location and all of the furniture is already here (including my big screen) [grad]
Dev [kid]
I am still wondering as to why you do not use an offset account to reduce your interest expense and improve cashflow while not losing any potential deductibility as and when you need it. Each to their own I guess.
TMA
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First Home Buyer WebsiteExactly
[hat]
I thought I should add a bit more just to demonstrate my point…
Why earn 5.50% and pay tax on it when you can save 6.50% by parking money in an offset and get to your next property sooner while maximising deductibility when you take the money back out?
Just so you know, if negatively geared, paying out the 6.50% can only recover less than 3.25% so you are really behind the ball by about 6.00% on your spare funds after you are taxed for the income earned on your “high interest accounts”.
Is there an emoticon to respond to this?
Just so you know, all I was trying to do was help you with a better deal!
TMA
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First Home Buyer WebsiteAgain, you totally missed the point. Offsetting is an ongoing benefit when used properly. You do not need large chunks of money sitting there as long as good cash flow is going through the account!!!
TMA
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First Home Buyer WebsiteThanks devilcv8, looking for good lo doc investment loan myself right now! Will call Bankwest…
Hi kendo & welcome to the forum,
The BankWest Lite Home loan being discussed in this thread is fairly good @ 6.65% but unfortunately it’s not a Low Doc product,
BankWest do have a low Doc product (Easy Doc Loan) at 7.24%, but there are other low doc products around with lower rates, cheers.Regards
Steven
Mortgage BrokerMobile Mortgage Market
Ph: 0402 483 216
[email protected]
http://www.mobilemortgagemarket.com.auPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
Steve, I think that was just an attempt at firing me up by kendo (aka ???).
TMA
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First Home Buyer WebsiteKendo i am warning you dont fire up the chick magnet.
Cheers Richard
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http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
Kendo i am warning you dont fire up the chick magnet.
Cheers Richard
[email protected]
http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
hahahahahahaha…. I lost that title in 1998 after leaving the Gold Coast. It has been down hill ever since!
TMA
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First Home Buyer WebsiteQuote:Originally posted by TMA:Steve, I think that was just an attempt at firing me up by kendo (aka ???).
Nup, just seriously looking for a good lo doc loan!!! [biggrin]
Can anyone tell me what LVR Bankwest will do on a block of 5 units on 1 title in a large regional town of WA? Also up to 80% do they use in house mortgage insurance or PMI or GE?
Thanks in advance for any responses.
Also are they strict on serviceability?
regards,
KarinaKarina,
With 5 units you will be looking at a commercial loan. You will be lucky to get 80%, although if it is a particularly good deal for some reason, you never know what you might be able to get.
Regards
AlistairI would even settle for 70% LVR, but need a competitive residential rate, any suggestions?
Hi Karina,
ANZ may do it at residential rates on a lower LVR, approx. 70%. Cheers.Regards
Steven
Mortgage BrokerMobile Mortgage Market
Ph: 0402 483 216
[email protected]
http://www.mobilemortgagemarket.com.auPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
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