O.K Let’s get into it….
One bank with low intrest rate will lend me 100,000, But will not lend me any more if i want to buy any more houses.
Other Bank with higher intrest rate ( about 1% higher) will lend me 100,000 and is open to lend more to buy more properties.
Can I..
Get the $100,000 from the first bank (low int) in a line of credit. Then only use $20,000 of it as a deposit on a $100,000 house whilst borrowing the remaining $80,000 from the other bank to pay for the house.Why… so i can still get some of the money at a low interest and use it to fund the multiple properties i may want to buy.
Will the banks allow this ?
Any other suggestions ?
Remember: Polar bears have black skin and hollow, transparent fur[jealous]
This will be allowed as long as you meet all the criteria for the second lender.
Are you certain there isn’t a third lender who can give you everything you need at the most competitive rate?
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
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.
Wallflower,
I agree with Mortgagehunter, maybe you could look to a third lender that meets all the criteria you are seeking.
My concern is that to save yourself 1% you are willing to access loans from both banks (which is fine, but…) you are doubling your establishment fees and other bank charges, which may in fact negate any saving.
Jo
I Hear wot you’re saying Jo,
Just thinking looong term, if i cough up initially etc…Simon, can you point me in any direction ??
Not without more details.
Can you email me the story?
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
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.
Hi Wallflower,
When you are looking at finance you need to consider your future investment strategy.
Mortgage Insurers add up your borrowing that they insure and you may find one day that you max out on what you can borrow from lenders who mortgage insure (whether you pay for it or they pay for it).
Interest rates are one area to consider, but here are other costs e.g. establishment fees, ongoing account fees and also the possibility that some banks offer professional package discounts for borrowings over a certain amount. This may change the interest rate and fees that you are being charged. Sometimes this is on a sliding scale depending on how much you have borrowed from them.
ciao
LoneHi Wallflower,
The cheapest loan may not always be the best option,
Keep in mind the decisions you make now may have a negative affect on your ability to service future lending,I also fail to see how any lending institution can predict the amount they are willing to lend to you in the future,
After all, any future lending will depend on the amount of income available at that time to service such a loan,
The amount of proposed rental income will no doubt be one of the deciding factors in determining your future borrowing capacity
Good Luck,
Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:1800 820 500
VictoriaPLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
Just curious on the logic of taking $20,000 out of the Lowest Interest LOC when you would be best served in doing the reverse…
Use as much of the LOC in the lower interest account as possible and then only keep it paying off the interest (IO) while using the higher interest account for transactions/knocking the amount payable down on.
So in your above example your calculations would look like this:
100,000 = 80,000 (+1%) + 20,000 (0, where 0 is the lowest interest value)
Best Option I think would be:
100,000 = 100,000 (0) with 100,000 (+1%) for any other investments needed.
Or the reverse of your example:
100,000 = 80,000 (0) + 20,000 (+1%)You have to minimise interest the best you can, so if you can get two LOCs do the maths on what is the best way to limit the amount of interest you end up paying.
Hope that helps.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
