Hi all,
Can’t imagine that I would ever call on anyone for help.
It’s not in my nature.A young bloke asked me to explain my loan structures to him.
So i down-loaded my structure for him. Only when I gave it to him did it seem that my loan structure mightn’t be best one to duplicate.Maybe i’ve given him a bum steer.
I hate to admit it, but I’m not perfect. And the thought that i’ve misdirected him would be sad. For us both.So I’m now asking for help ,so this young bloke will get the best of advice on his loan structure.
Can any poster explain how they’ve set up their loan structures?
You don’t need to put in your figures, just so he can see how it is done.With humble thanks,
bruham.There is nothing much to it. Just keep all loans separate (not cross col) and gradually increase the loans as the values rise. Use the increase for the deposit on the next one.
Also, probably best to get loans in one name only. ie not with a partner. This will allow you to go further eventually.
Terryw
Discover Home Loans
Parramatta
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Everyone’s situation is different,
It would be better to post the details (within reason) of your current structure and future plans on the forum for comment.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.
Originally posted by Terryw:Also, probably best to get loans in one name only. ie not with a partner. This will allow you to go further eventually.
Terry, when you say partner, do you mean a business partner or Wife/Husband. My wife and I have 1 IP and our PPOR and are looking around for another IP at the mo. I don’t think I could get a loan in my name only (or my wife’s) due to income restrictions and existing joint debt. Can you please advise of the benefits, and why you can go further (eventually) when in one name only.
Also, my FI encourages cross collatoral in order to borrow 100% for new property, why is this a bad idea?
Thanks for your input
Mike[/quote]
I don’t think I could get a loan in my name only (or my wife’s) due to income restrictions and existing joint debt.
[/quote]Mike,
You better speak to a broker and find out for sure. Be a shame to let an assumption hold you back [biggrin]
I personally don’t believe xcoll to be such a bad thing for most people. But that is just me.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[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.
You don’t have to crosscolaterise your portfolio to borrow 100%.
Accessing the equity in stand alone loans will still allow you to borrow 100%, unfortunately quite a few lending institutions fail to mention this and encourage cross colaterisation.Why is X-coll a bad idea?
Lets assume you need to access equity in 1, 2, 3 or all your properties, in order to fund the deposit and closing cost on a new purchase, but unfortunately you have hit your serviceability limit (max borrowing capacity) with your lender and all properties are x-colled,Solution: refinance part or entire portfolio,and de X-coll ….Expensive and messy, and unfortunately happens a lot.
Prevention is easier than the cure. 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.
I am also a advocate of not X Coll your loans As Steve mentions you don’t need to X Coll to borrow 100% + on your next IP it is all about structure.
I do however prefer to see my clients purchase in Trust rather than their personal name.
In essence there is 3 main types of Trust each of which has different benefits dependant on your own situation:
1) Disc Family Trust
2) Unit Trust
3) Hybrid Trust (combo of 1/2)Consult a mortgage broker before you jump into your next purchase as undoing what you have got can be expensive if you don’t get proper advice first up.
Richard Taylor
Residential & Commercial Finance Broker
**Lodoc Commercial loans from 7.39%**
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Hi all,
Thank you for all your replys. I’ve just down- loaded your replys and will give it to him on my next sighting.
You made more sense than me showing him how my structure worked.
Having professionals explain it and seeking their advise is always the best option.
Again many thanks.
bruham.Originally posted by aliandmike:Originally posted by Terryw:Also, probably best to get loans in one name only. ie not with a partner. This will allow you to go further eventually.
Terry, when you say partner, do you mean a business partner or Wife/Husband. My wife and I have 1 IP and our PPOR and are looking around for another IP at the mo. I don’t think I could get a loan in my name only (or my wife’s) due to income restrictions and existing joint debt. Can you please advise of the benefits, and why you can go further (eventually) when in one name only.
Also, my FI encourages cross collatoral in order to borrow 100% for new property, why is this a bad idea?
Thanks for your input
MikeHi Mike
The others have answered your question on cross collateralisation. I now think it is not such a bad thing, but best to avoid if possible.
I have seen a lot of clients come to me after buying bits of various properties with partners. The trouble with this is the lender assesses you on the whole debt, but only allows you to take into account the income on the percentage you own. This can hurt!
What I had in mind mainly however, is people getting low doc loans. Most lenders had a maximum exposure level per person. This used to be rather low, but now is around $2.5mil. So getting loans jointly meant you reached the limit quickly.
So where possible, where income allows it, get the loan in single names. eg. a couple with one person working, one person staying at home. Why have the loan in joint names if the second person has no income? Keep them free for a possible low doc/no doc down the track.
it also makes no sense from an asset protection point of view.
Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe†in subject line.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
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