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Do you have a home loan on your own place – you might be better off working the salary/offset account on your personal loan finance as this wont affect your tax etc.
Anita Marshall
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected]Firstly to answer your question regarding brokers. Yes, we are paid a commission by the lender that we put the loan through. I personally dont agree with brokers charging brokerage fees on top of the commission that they receive however there is no regulation that prevents brokers from charging a brokerage fee so i would recommend that you use a broker that:
1. Doesnt charge a brokerage fee
2. That has had a MINIMUM OF 3 YEARS experience in mortgage lending (unfortunately some dont have a lot of experience)
3. That is accredited with a large panel of lenders including all the major banks and other leading mortgage providers.If you do that you will have a selection of lenders to choose from and they can do product comparisons to show you what each particular lender would cost you including ongoing fees etc.
As for the DEF – most lenders do have them and $700 is actually one of the cheaper of them. There are some lenders that charge 3% DEF in the first year and then it scales down from there. Bankwest dont have a DEF at all at the moment so if you are interested in a product that is cheap to get out of it may be worth considering them. They also have competitive interest rates/fees etc however as mentioned above I would recommend using a broker to compare the different lenders and if you use a broker that doesnt charge a brokerage fee then the exercise wont cost you a cent.
Anita Marshall
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected]On a $1million loan I would recommend that you take advantage of a 12 month honeymoon rate then at the end of the 12 months pay a switch fee (most lenders charge around $300 but often waive the fee anyway) then switch to a different product.
For example you could get a 12 month honeymoon rate of 6.24% for 12 months with no application, valuation or legal fees then at the end of the 12 months it would revert to the discounted standard variable rate of 7.07% however instead of paying that you pay a $300 switch fee (if that) and swap to a 3 year fixed of 6.84% or 6.87% variable.
The rates I have quoted above are based on the new rates after the rate rise last week.
If you do your sums on the $1million you will save about $6000 in interest by structuring it this way.
Hope this makes sense but if not please let me know and I will go into more detail for you.
Anita Marshall
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected]In 99% of property loans I have put through lately the valuation comes in at the purchase price so it would be difficult to find a lender that would get a valuer to go above that unless it is a “favourable purchase” (as in you are buying it from a family member for less than the market value or something similar to that).
Depending on which area you are located in I have found the valuations for RAMS and Suncorp come in higher than most in the area that I am located (Port Stephens/Newcastel) but honestly they havent come in higher for a purchase.
I would recommend you get a broker to look at your overall structure and make a recommendation based on your asset/liability position. A lot of lenders will lend to 100% now anyway on full doc loans at very competitive rates. RAMS will now lend to 100% at their standard variable full doc rate.
Anita Marshall
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected]As long as you can afford the vendor finance you can show it in the full contract and some lenders will still finance the difference – you would need to choose your lender carefully though. Otherwise as you suggested you could draw up a seperate agreement.
Anita Marshall
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected]If you have enough equity in the property you could possible set up a 100% offset account, borrow the amount you will need for payments or interest only during the construction period and use that instead of having to make the payments as you go yourself out of your own funds. This will mean that you are not paying interest on the whole amount as you go. (i hope i have made sense – if not email me and i will try to explain in plainer English)
I normally recommend Suncorp or Commonwealth Bank for construction – they (along with a some other lenders) will only make you pay interest only payments as you draw down during the construction period. Some lenders make you pay principal and interest on the end debt from the first draw down which can make things tight.
Anita Marshall
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected]Funnily enough a lot of lenders done like income producing properties. The size and zoning of the land are not so much the issue – what will be the issues they will look at will be:-
– Can you service the loan
– Postcode of the propertyI would recommend that you shop around using a broker who doesnt charge a brokerage fee – they should be able to find you a lender that will go to 95% plus capitalise the LMI costs if you can service the debt.
Anita Marshall
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected]My understanding is that a lot of lenders will only lend 80% for overseas residents however ANZ do have a product which may suit you needs – i beleive they will go up to 95%…………
As for the refinance/increase in debt – it might be hard to find a valuer to value it above the recent purchase price – the valuers are extremely conservative here at the moment so I wouldnt count on being able to do that easily however I guess anything is possible.
Anita Marshall
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected]Hi there – i am a mortgage broker/planner however I dont specialise in commercial finance – i actually refer all my commercial business to another broker who is based in Sydney. He specialises in commercial finance and because of the large volumes of commercial deals he puts through the various commercial lenders he can often negotiate better rates than a lot of other brokers. If you are interested in contacting him for an obligation free consultation over the phone let me know and i will give you his details. He has won many awards including the Plan 2005 Mortgage Broker of the Year.
Anita Marshall
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected]RAMS have a low doc loan starting at 6.72% with no LMI – they also have a special for the month of April there is no application fee. Their no doc 70% rate starts at 7.24%pa. Dont forget that a good broker can do all this shopping around for you without charging you a fee so dont try to work all these things out for yourself – it gets too confusing. A broker can do the homework for you and it wont cost you any more than if you go to the lender direct yourself.
Anita Marshall
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected][blink]I would recommend that you speak to your accountant prior to doing that because it may not be of any benefit to you because the funds you draw back may not be tax deductible unless you put in some funds of your own into the investment property in the first place. If that was the case all you may end up doing is creating a taxation nightmare for him at tax time.
However, if you put some of your own funds into the IP and want to draw them back to pay off your home loan then you could have the property re-valued on completion then put in an application to increase your loan amount and take some of the equity out for your own home loan.
Hope this makes sense.
Anita Marshall
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected][biggrin]
Are you wanting to borrow over 95% of the land plus building costs? If so that may be why you are getting referred to commercial lenders. Suncorp Metway will look at the end value at residential rates and there are also many other lenders that will do the same but not many of them will go over 95% of land plus building costs regardless of the end value so perhaps this is where you are coming unstuck.
Do you have equity in another property that you could cross-collaterallise into the finance deal?
Get a broker to do some shopping around for you. Most brokers do not charge brokerage fees so hopefully it wont cost you anything to get someone else to do the homework for you.
Anita Marshall
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected]I would recommend checking with your accountant as to what he feels is best for your situation with that question.
Anita Marshall
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected]Often with commercial the lenders require more equity or deposit that residential so perhaps this is where you are finding difficulty. How much deposit/equity in the property do you have?
Anita Marshall
Managing Director/Mortgage Planner
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected]Vendor finance is simply where the vendor is offering lend the purchaser the funds to purchase the property instead of them having to take a mortgage out through a bank/other institution. YOu need to look over the contract carefully to check things like interest rate, default rate, fees, charges, penalties for early payout – treat it like a normal instituation and shop around. Sometimes the interest rate or the purchase price is higher so just check into those things too. Some clients prefer to take 20% vendor finance and finance the rest through a main stream lender then organise to pay back the vendor finance asap.
Anita Marshall
Mortgage Planner/Managing Director
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected]I am not sure if deposit bond companies will guarantee a deposit until 2010 so you might need to organise a bank guarantee. usually deposit bonds are short term (up to 6 months) and bank guarantees are for longer periods. The cheapest deposit bond company that i have found in the past has been Deposit Saver however shop around as there may be others. As for bank guarantees I honestly have no idea of the cost or process involved. Give your main financial instituation a call and see if they can help you – i know ANZ do them. Sorry if this isnt very helpful but this is not an area that I specialise in.
Anita Marshall
Advanced Finance Solutions
http://www.advancefinance.com.au
[email protected]It would depend on which lender you use however most of them require you to start making payments as soon as you have drawn down any part of the loan. Most will allow interest only during the period of construction and you only pay interest on what you have drawn on. A lot of them will also allow interest only for up to 10 years afterwards. YOu just need to shop around (or get an experienced broker/mortgage planner to do that for you). Some lenders will also allow capitalisation of interest so that you are not making any payments at all however you usually need to have equity in the property being contructed or another property [aacool]to allow this. Hope this helps
Anita Marshall
Mortgage Planner
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected]I would just check into the Wizard rate of 5.71% – does it revert to a higher rate after 6 months?
Anita Marshall
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected]There are quite a few lenders who will now allow negative gearing amounts to be added back into gross income. This is becoming more and more common. I woud recommend speaking to a mortgage broker who will look at your individual circumstances and advise you which lender is best for your scenario.
Anita Marshall
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected][fez]My advice would be to contact a broker who will give you advice on your situation. If you have $18k deposit thats a great start – the interest rate will depend how much you want to borrow but as long as there is equity in the deal you should be able to do the loan.
Anita Marshall
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected][blink]
