All Topics / General Property / LVR’s & Cashflow

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  • Profile photo of equitykingequityking
    Member
    @equityking
    Join Date: 2004
    Post Count: 17
    October 12, 2004 - 3:56 am

    I was wondering, are most people who visit this site basing their cashflow on 80% and under (avoiding Mortgage Insurance)? Or are many people acheiving positive cashflow borrowing more than 80%?

    Cheers

    Jordan

    Profile photo of westanwestan
    Member
    @westan
    Join Date: 2002
    Post Count: 1,950
    October 12, 2004 - 4:18 am

    Hi Jordan

    i always put in 20% and
    1. avoid LMI
    2. feel i have a bit of equity in the property
    3. don’t put more in so i can purchase more deals so that will achieve a higher cash on cash return. I do this strategy while i can get a higher return than i would if i had the money paying off the mortgage
    4. gives me a consistant “meter” that i can compare deals to see how they are performing

    regards westan

    I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database

    Profile photo of z1z1
    Member
    @z1
    Join Date: 2004
    Post Count: 3
    October 12, 2004 - 5:03 am

    westan,

    I understand you adopt the method of putting as little cash into the property as possible (20%) without attracting the LMI, great concept.
    So in that case, what are you’re thoughts on interest only loans? Do you use them? or do you use P+I loans? or a mixture of both?

    z1

    Profile photo of westanwestan
    Member
    @westan
    Join Date: 2002
    Post Count: 1,950
    October 12, 2004 - 5:22 am

    Hi z1

    i’m a fan of interest only loans. But i haven’t always been able to get them, i have an LOC which is effectivily an interest only loan. As far as what mortgages i have , well its a real mix i have some variable at 6.15% through homepath, some fixed interest loans with NAB at 6.69% and a LOC with citibank. The homepath one is interest only as is the LOC but the NAB had to be part principal also (they forced me to). My NZ loans are nearly all P&I.

    Why i like interest only is
    – if i was paying off the loan (P&I) i’d be in effect getting 6.15% interest on the money, (or what ever the interest rate is). I feel that i can reinvest that money and get a lot high return than that.

    Sorry if this is a big confusing

    regards westan

    I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    October 18, 2004 - 7:54 am

    I start with getting 95% loans with the LMI added on top, trying to use as little cash as posisble because I didn’t have much to spare. However, It is good to get 80% loans if you have hte equity.

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

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