Richard Taylor

As Richard said,
The forum is a fantastic place to start, you can pick and choose the advice you heed and over time you will see who is here simply to help, and who is here to promote themselves or their services.

read as much as you can and form your own opinion, but take your time!

good luck

Ben

Good questions!

Ive mentioned this before but a friend of mine in the banking sector told me that he margins on home loans at the moment are only about 1%….

Answers will vary but i think in answer to your other question customers should come first. no customers no business…

I would like to know also…

grimnar thanks for that explanation – very helpful for me too

One thing to remember is banks have margins on their loans, some as low as 1%… a small percentage against a considerable risk.

one arguments i guess lenders have in their favour is that they too are a business, and need to raise the rates along side the RBA to ensure the margains remain stable and business over all remains sustainable. According to a good friend of mine in the banking sector, having more credit and funds/loan deposits come in mean they have more capital to lend out which brings the cost for banks to purchase funds to lend, down.

A valid point he raised, was that if a $45 increase per month brings someone to the verge of bankruptcy then should said borrower have been lent the funds in the first place? again though, if they are told no from one bank, they will visit as many institutions as possible till the get the result, even if it brings financial strain upon them. a choice that the borrower makes, knowing what the payments are going to mean for their disposable income. According to my friend, we have also been in a period of rates being at an all time low, and that "anyone with half a brain" would know that rates would not stay this way with a labour govt in power, as historically they have had above average rates.  a very valid point i think.

As a consumer, i am against such a steep points rise from lenders in retalliation for the RBA rise on the back of such healthy profits. i Believe houses are above average price at the moment (obviously not everywhere) and perhaps they could do with a track sideways or similar movement.

Everyone has their own view on the current state of affairs but as someone who needs to be able to borrow in order to move forward, and needs a lender to look out for my needs in order to gain business (wishful thinking?) i am a little nervous, and hope the banks/major lenders dont become to hard to get deals across the line with..

After talking to my friend today though i think that its a tough call for lenders to make, do whats right for them as a business, and make people unhappy, or, keep people happy.

i think i know what the shareholders and execs would prefer 

I cant imagine how many people it will affect in different ways, I wonder, if any of the major lenders decide not to make as adverse a change as the rest if it means they will get a huge gain in business,

immediately after typing that i thought to myself, why the heck would they, its not like they need the extra, people need lenders and they will get the business anyway.

/sigh

Hi PGD,

I have had a similar situation, someone i know who has alot of equity, and a solid job but no real knowledge of property investment wants to make a purchase together. I know him and his family well, but if i go ahead with it and we purchase a property together (with the aim of selling for a profit relatively quickly) i will most certainly have a legal document drawn up that outlines how any profit will be broken up, and the responsobilities of each person. im no trust expert but those who are might suggest you have a trust you are both a part of if the plan is to have an investing partnership ongoing. depends how you are structuring i guess and what you are doing with the property/s.

IMHO definately seek legal advice regardless of how close you are to the partner, keeps everything professional.

i guess the advantages of combining forces is borrowing power having 2 incomes or alot of equity etc, as well as having 2 brains working on your deals!

good luck
Ben

you will have to pay $130 after you purchase your PPOR? i hope im not missing something but you wil be living in it, so only paying for your mortgage as an accomodation payment wouldnt you? or are you going to move into your ppor for a perios of time then move out again?

lol! well said