Got a flyer in the mail the other day from Resident Home Loans. Rang them & made an appointment for someone to come & see me. The girl I spoke to sounded great – very knowledgable about investment loans & structuring. Rates & fees sound good too. Has anyone heard of them?
They appear to be a typical mortgage originator who fully securitise their loans.
Organisation such as these are dime a dozen.
Given the recent jitters in the US sub prime market you may well find that their costs of funding increase.
Also why would you use a fully insured lender if you didnt have to for your borrowing as this could severally limit your future investment plans.
I am suprised they commented on structures as they dont appear to hold Financial Services License.
Richard Taylor | Australia's leading private lender
Richard, not sure what you mean by 'fully insured lender' severely limiting my future investment plans? Can you please explain this further?
Fully insured loans incur LMI regardless of the LVR. The LMI companies place extra restrctions, more stringent than the banks such as Postcode restrictions and the main one Maximum exposure which means they will only lend up to a certain amount per client. If you are planning on buying many properties, then will limit you quickly.
Another potential problem is if you are using full docs and then go Low or No Docs, it won't work if the LMI company already knows your employment details.
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
Terryw wrote:Another potential problem is if you are using full docs and then go Low or No Docs, it won't work if the LMI company already knows your employment details.Yep – Terry has highlited here what I believe is the only real issue of concern, (as long as you do not plan on having more than 2 -4 million of property without refinancing with a non securitised lender asa you equity builds up years down the track – well after any significant deferred establishment fees are relevant) …In fact it is a great balanced reply to the question raised.
This is why it pays to really sit down and work out exactly what you hope to achieve from investing and the structure you plan to use prior to making decisions. Your lender or broker is not a mind reader, and you will NEVER GET this type of assistance form a ON-LINE MORTGAGE ORIGINATOR…..
The other problem of course is you may apply for a loan of any type with a mortgage insured lender, get declined, and of course the next lender you apply for (with some creative adjustments perhaps) used the same mortgage insurance company…….which odds are they will! And the thing is, you do not necessarliy know 'who uses who', as it is not disclosed normally.
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