cesar loan

Viewing 5 posts - 1 through 5 (of 5 total)

jamkat76
Member
@jamkat76
Join Date: 2007
Post Count: 2
October 30, 2007 - 9:37 am
Hey there
We are new to investment property buying,
and were told recently about a type of loan called a "Caesar loan".
Just wondering if anyone has heard of or has experience with this type of loan
Does it work and could you explain it in simple terms
The person explaining it to me lost me a little bit with technical jargon.
Any help or info would be greatly appreciated
thanks and cheers

JAMKAT 76
propertypower
Member
@propertypower
Join Date: 2006
Post Count: 312
October 30, 2007 - 11:34 am
Hi,
I am not 100% sure but I think they are non-conformance loans.
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
October 30, 2007 - 1:03 pm
Maybe you are referring to a loan by a company called Seiza? It is probably the so called 'cashflow loan" whereby they charge you the full interest rate but only make you pay 3% or so with the rest capitalised into the loan – ie your loan is increasing as they are adding the interest to the balance.
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jamkat76
Member
@jamkat76
Join Date: 2007
Post Count: 2
November 2, 2007 - 8:38 am
Terryw wrote:
Maybe you are referring to a loan by a company called Seiza? It is probably the so called 'cashflow loan" whereby they charge you the full interest rate but only make you pay 3% or so with the rest capitalised into the loan – ie your loan is increasing as they are adding the interest to the balance.

That's the general idea i got of the loan sounded good in principle
do you have an opinion or any warnings about this type of loan
hschmid
Participant
@hschmid
Join Date: 2007
Post Count: 87
November 4, 2007 - 3:58 am
It is Seiza
They charge >8% interest and max 80% LVR
The following is a guide.
yr 1 u pay 4 % and the remaining 4% is capitalised onto the loan.
yr 2 u pay 5% and capitalise 3%
yr 3 u pay 6% and capitalise 2%
yr 4 u pay 7% and capitalise 1 %
Yr 5 onwards u pay normal rack rate
The figures are not precise but pretty close .
Can help with cashflow but will eat equity.
Consider yr own internal version where u create a LOC and capitalise interest to marry yr cashflow.
R U obtaining tax benefits weekly? This often fixes cashflow problems. Talk with yr accountant.