Forums / Getting Technical / Finance / Financing PPOR with intention of converting to IP

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  • Profile photo of Anthony ZanattaAnthony Zanatta
    Participant
    @azanatta91
    Join Date: 2016
    Post Count: 25

    Hey all, I’m coming to the tail end of knuckling down and saving for my first property and the scary time’s come to start looking around and doing stuff!

    I plan on using the FHOG grants and stamp duty exemption, so I’ll need to live in the property for 6 months and then I plan on renting it out. Loan-wise, can I continue using the same Home Owner loan once I make the switch to an IP, or is this frowned upon? (and more importantly, illegal??).

    I’m starting the search for a broker as well, a real estate agent has recommended someone from Loan Market as the go-to guys. Any bad things to say about these guys? Open to any other recommendations you may have as well.

    Thanks in advance!

    Cheers,
    Anthony

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 11,992

    Hi Anthony

    Firstly welcome to the forum and I hope you enjoy your time with us.

    Congrats on making the move to purchase your first property. I remember buying my property back in the UK in the 80’s so very exciting.

    Loan Market are the finance arm of Ray White so I am assuming you are looking at buying thru them.
    What you have to understand with a franchise is they are as good as the individual operator.
    Personally i would prefer to use someone who can walk the walk as well talk the talk.

    With what your intensions for the property are I would normally suggest you looked at an interest only loan with 100% offset account however with a high lvr the rate of charged will be high (assuming you can even get an interest only loan at the lvr you are after).

    You would probably better off trying to look at longer term loan on an a principal & interest repayment with a considerably lower rate. Sub 4% is still doable even at 95% lvr + LMI.

    Given the market as it is at the moment I would probably suggest you consider a pre-approval as approval time might get away from you if you find the right property.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Anthony ZanattaAnthony Zanatta
    Participant
    @azanatta91
    Join Date: 2016
    Post Count: 25

    Hey Richard,

    I wasn’t aware of Loan Market’s connection to Ray White, thanks for that tip.

    Regarding loan type, I’ve read about professional loans which allow for a 10% deposit with no LMI, but taking into account the recent changes in lending practices post APRA, are these an attainable option? If so, do you know of any brokers who specialise in this? I’ve found one guy from Genius Loan Solutions so far that appears to specialise in this area, but happy to take any other names that people might have dealt with in the past. My plan is to keep the remaining portion of my deposit in an offset to start saving for my next property.

    Cheers,
    Anthony

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 11,992

    Hey Anthony

    Yes there sure are and we do a lot of these types of loans.

    In saying this there are a numbers of restrictions so will depend not only on your profession but also your income level, type of loan product you are after etc etc.

    Did 2 deals this week funnily enough for Forum members who were both dentists and neither will pay LMI.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Anthony ZanattaAnthony Zanatta
    Participant
    @azanatta91
    Join Date: 2016
    Post Count: 25

    Good to hear that they’re an option – PM incoming Richard :)

    Anthony

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    Professional loans with LMI waivers are still very much there – medico, lawyers, accountants are the main industries which qualify but there are a few other niches. You’ll generally have to be earning a certain amount to qualify for non-medico based professional LMI waivers.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
    Email Me | Phone Me

    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,065

    a real estate agent has recommended someone from Loan Market as the go-to guys.

    Chance are that REA is affiliated with the company they recommended.

    Personally – I like to minimise conflicts of interest so I’d appoint my own MB rather than go with the one the REA is recommending.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

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