Forum Replies Created
- Terryw wrote:Guarantors don't have any effect on you claiming anything. So you should be able to claim the interest on the whole loan amount (if the property is rented out).
You parents will be givening an equity guarantee, so you will still have to demonstrate to the bank that you can service the whole amount to be borrowed. They will also have to put up their property as security so it generally (but not always) has to be with the same lender as your loan. It would probably be safer for them if they just lent you the money.
parents income can also be used for servicing; you can use guarantee for security, servicing or both.
You could also borrow 80% against the purchase property. Followed by a loan for 20% against your parents property. The 20% can be in your name however will need a guarantee from your parents (as it is secured against their house or IP).
As both loans are in your name you will get all tax benefits / or any gov grants.
By doing it this way then loans are in your name. Your parents risk / guarantee is limited to the 20% loan.
Once the property has increased in value you can refinance the 20% against your property thus releasing the guarantee in full.
Banker
Nice to have your post followed by a promotional advertisement.
I missed the part in the first post saying that it was for an existing property.
Rather than getting a new loan they should be able to complete a variation (switch) from your current loan to a fixed loan (assuming current loan is variable). This should only take a few days. As Richard said; you cant just pay 12 months worth of payments into the loan; it has to actually be charged as interest…
You don’t have long to find a property if you want to prepay Interest this financial year.
Approx 7 days to go if you buy with a 30 day settlement…
I agree with Richard:- the deal is too small to be asking for presales. Shop around.
Interest only for the life of the loan?
You can already get this on a line of credit… Most interest only loans allow you to roll into another interest only term when the interest only period is up… What’s the diff?
Sorry to say it but there won’t be real competition to the banks until long term wholesale funding costs come down, until then we will continue to see these “new” creative products by smaller lenders; that are simply a different way of decribing what already exisits… With a higher rate of course…
Just shows how desparite some 2nd tier lenders are at the moment.
Just because you can doesn’t mean it’s a good idea. Everyones circustances are different:-
There is nothing wrong with big loans for clients that have strong and secure cash flow. Loans of any amount can become a problem if you have trouble servicing them.
Hi Richteddy,
max loan with LMI is higher; depending on the lender.. I dont know the max but in some case up to approx 1.5m is OK however It would be very expensive and hard to ge approved.
If you revalue in the future and borrow 80% you won’t need to pay LMI again.
If you borrow 600k at 90% today with a major bank you can go back to them in a few years and revalue; then lend up to 90% again. This sometime only incurs a small premium as you only pay LMI on the new funds (might only be a few hundred dollars). Therefore if your property has gone up 100k you can go from 600 to 690 for just a few hundred dollars LMI.
Be careful with lender selection. A lot of nonbank will charge you onthe full amount again; ask before you apply how future increases incur LMI…
To add to my post above; If you take 5 years interest only up front debt servicing is calculated over 25 years. This is because they need to ensure you have capacity to repay after the IO period if it converts to PI. Hence the variation option allows you to borrow more.
jacqui_03 wrote:Yeah Richard I know most Banks will calculate IO as P&I however im basing it on a lender which will use a 30 yr term on normal SVR loans where they will only use 25 year term on LOC's.
Do you and Terryw agree on not cross collaterising securities?
With the 0.1% added on to the rate for LOC and 25 year debt servicing it smells like Cba.
If so; you can take a SVR with interest only for 1 year and service your debt over 29 years. After 12 months you can roll into another interest only period for 5 years with a variation from :- no credit or supporting docs required. If you do this with an offset you have your cake and can eat it too.
If required you can even take a 30 year loan an go to a branch to request variation to interest only the day after settlement:- they can do it over the counter. Once again credit assessment is not required to do this…
I just thought I’d put some input in to this one. I’ve just finished a property in melb. 1.5 years. 500k purchase. 700k sale. After taking out stamps and costs I’ll make 150k with no tax – l lived in the house so havnt included interst as a holding cost ( have to live somewhere).
I’m now looking to do this again however with one important factor: I know I might not recover the money on the next project in the short term.
The market does not need to go down for you to lose. If it does not go up you won’t recover stamps, agents fee and interest etc. I will only buy if I can afford to hold if things don’t go my way…
I wouldn’t be buying expecting the same growth as we’ve had in the last couple of years.
I would buy a broker industry magazine or similar and go for someone with some industry recongnition e.g. Has won some awards or similar.
I don’t know the exact stats however the average broker in Australia settles less than 700k per month. Let’s say 2-3 deals. Although the industry is tightening up there are still a lot of cowboys that struggle putting a deal together.
If they don’t write volume (like the average broker) they won’t have all accreditations as CBA, Westpac and some other lenders have put minimum volume requirements in place : – or the brokers accreditation gets cancelled. CBA have axed over 5000 with more cuts to brokers being made. Westpac have similar numbers.
A good broker is worth their weight in gold. If they are a one man show I’d look for someone a little more established…
Qlds007 wrote:Strange that you have to find the right manager of the CBA to get the deal done as surely if lending to an applicant with 1 months casual employment is Bank policy you should be ok anywhere you go.Policy is not as black and white as some non bank lenders. There is no minimum term for employment under 80%.
Re getting a good banker, the days have gone of just filling out forms and sending them in to get approved. The banker will need to mitigate the risks and sell the deal on specific points e.g. Same employer / different city, consistant with industry /level of income.
I recently had CBA approve a deal for a self employed contractor, who had a néw contract but did not start for another month. Also had them approve a self employed customer without financials and without using lowdoc policy ( also a single source contractor).
CBA will still do deals if the risk is good and deal is presented well: – hence a good banker supporting you is important… I’ve said it before in other posts:- most problems / declines at the banks come down to poor presentation and lack of comments.
Assuming all bankers have the same chance of getting a deal approved is the same as assuming all brokers will also achieve the same outcome… Personally I think the person you choose is more important than the lender.
Unfortunatly I don’t know a CBA banker in QLD however would always use a CBA mortgage innovator: – you can
find one on google.CBA at 80%. As long as you get a good manager you should be fine. Assuming servicing in OK. What state are you in?
Not saying you don’t Richard-: point being most brokers struggle with business / commercial deals let alone reading a P+L or balance sheet.
Qlds007 wrote:Really just did a 6 pack of non strata brick units thru CBA only last week.yes but I said broker / retail. Even if this is broker introduced it would have gone commercial / business banking (even if done on a home loan product). Most brokers are not commercially accredited and most that are don’t know how to package a commercial deal.
I wouldn’t go the low doc option as you are obviously not self employed: – if you get an ABN and provide a fake income declaration you might be OK but if it goes bad you’ve committed fraud.
CBA will do it at 80% if you’ve worked on the same industry, it wi helpif your previous financial year income was similar:
what sort of work do you do?
What was your previous employment?I don’t know exactly how hey manage their capital however they are owned and funded by Westpac. That does not mean Westpac won’t sell them in the future:- they are still run as seperate businesses.
Like Westpac / Rams, they didn’t buy all of the existing loans. People that got burnt are the ones that took loans before they were bank owned.
