Hi everyone
As my name states i am a young investor , well actually there's only some truth to that. im young only 19 but not an investor coz i don't have any investments. To get to my point im stuck with how i can get finance for my soon to be property portfolio. Heres the low down im a nurse working casual becoming full time , so far i roughly get around 38k a year. I have no bad debt to my name , no loans etc at all, pretty much i owe no one nothing except i help my parents out and pay around $150 a week rent etc. So what i'm saying is i need to know the steps to obtaining finance for a property investment. I have near to nothing saved , my parents have no money to offer and i think they've used all their equity in their permanent residence and property investments they already have so here goes:
– i have no money saved
– i have an area already planned where i want to invest
– do i go to a bank or broker
– what kind of loan to i look for – 100% no deposit etc
– can i avoid LMI if i have a guarentour for the deposit
– can i use another person's (family member or not) to use equity for a deposit
– fixed or variable
thanks for the reply guys.Start saving like mad!
You should probably try to buy a cheapy to live in for 6months, get the FHOG and then rent out after that. 100% loans are good, but you will need to come up with around 3% in LMI
Not many lenders will allow guarantors that are not related. Think RAMS does.
Also, you should change over to full time asap as it will be difficult getting a loan while casual.
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
young investor01 wrote:1- i have no money saved
-2 i have an area already planned where i want to invest
3- do i go to a bank or broker
4- what kind of loan to i look for – 100% no deposit etc
5- can i avoid LMI if i have a guarentour for the deposit
6- can i use another person's (family member or not) to use equity for a deposit
7- fixed or variable
thanks for the reply guys.Firstly…welcome to the forum…..
1. You are no different to 90 of the population at present – does not disqualify you from a loan
2. Great stuff!3. With your criteria, either a broker, or your local Rams franchise would be the best bets. Other than one almost major bank and a couple of smaller ones you will be treated by a leper asking for a 100% lend.
4. Depends on your eventual savings etc. SOme investor loans at 100% are possible, but would be principal and interest or have some other conditions . 95% is no drama.
5. With many lenders yes – if you can get someone to use their property as security for the 20% plus costs you will avoid LMI
6. WIth Rams Homeloans you can – not sure if anyone else will do it. Rams call it their 'Fast track' feature-it is availalbe on nearly all of the Rams loans, as it is a flexible feature, rather than a specific loan product as such.
7. A lot of people hedge their bets now. If you do not belive it likely that you would be able to make any additional repayments in the first few years, my 'gut' (currently digesting Fine Sirloin with the aid of a SHiraz…) says split it 50/50 or go the fixed…..but that's not me, just my gut…..And…..as a sidpoint you are in the one profeesion that is considered by a lot of lenders to be 'the' high demand one, thus mininimu employment periods/casual hours etc are not frowned upon as such. …so congrats! All the best with your investment journey…..
v8ghia wrote:[3. With your criteria, either a broker, or your local Rams franchise would be the best bets. Other than one almost major bank and a couple of smaller ones you will be treated by a leper asking for a 100% lend.
Woops…….that should read 'like a leper' not 'by a leper'….but I kinda like it……..
hey thanks guys for the help..keep them coming this making me tinker of new ideas for me to get finance.
TerryW
"You should probably try to buy a cheapy to live in for 6months, get the FHOG and then rent out after that. 100% loans are good, but you will need to come up with around 3% in LMI" i like that idea terry thanks for the heads up ive been looking into FHOG but the IP area i'm looking at is in regional SA and i live in sydney so i don't think thats possible at this present time but hey thanks i'll keep that one in the to do list.v8ghia
"Depends on your eventual savings etc. SOme investor loans at 100% are possible, but would be principal and interest or have some other conditions . 95% is no drama. " if it was a 95% LVR would i still be needing to pay for LMI ? Does neone noe any specific loans that are above 80LVR and where i don't have to pay for LMI either by the use of a small cash deposit, another property as security or equity built up by either my dads IP or PPoR.RAMS sounds like a good lending facility but due to the stock market and america's sub-prime mortgages crash it looks like they might be in for hiking up their rates whether fact or fiction . i still need to noe more:
Does any one know:
1 A loan where i can borrow 80% or more without paying LMI
2 if i'm using a property to secure the 20% deposit etc. does it have to have built up equity in it to use the property as security
( i think my dad has used up his equity in his IPs )thanks guys again the info and encouragement hope to hear from everyone else with a spin on getting the right finance.
Some lenders such as Westpac and ING can allow LVRs of around 85% without LMI.
You will need equity in the property you want to use as security. Just add up all loans and compare this to the value of all securities.
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
thanks for the info terry, il have a look at those homeloans
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