If you do substantial enough renovations, it can be as soon as 1 month – however this would mean needing to replace kitchens, bathrooms and full cosmetic reno.

In reality the valuer will note nominal increases after 3 months, but the biggest bang for buck will be achieved by waiting 6 months where the recent sale will fall off the radar and the value will 100% be based on the recent sales in the area.

And will you be legitimately living in the property?

And how will he negative gear more with you renting the property, compared to someone else?

Leasehold motel business purchase? They’ll generally want property security from the directors/guarantors, historical financials for the motel etc.

It’s all just silly trickery – in reality they’re saying if you pay more than necessary, you’ll save interest.

The same can be done for any repayment frequency. There is a marginal benefit in paying weekly in that interest is accrued daily and so you’ll be accruing less before the next payment, but we’re talking savings in the range of cents per week.

It’s a strategy that some of our clients use – but with the lending environment moving in it’s current direction it is becoming more difficult to finance. The whole strategy is dependent on the lenders being happy to release significantly large funds each time without another purchase lined up, which in many cases they are now rejecting or controlling the use of funds much more.

It’s simpler just to establish the finance needed in advance and so long as you have a strong finance position, you can still put in unconditional offers – after all you still have the emergency fallback position of putting the cash sum down.

Just outside of the suburb areas – you might be stretching it in terms of deposit for 550k, you don’t quite have enough to support the minimum of a 95% LVR + costs. Likewise even at this level your LMI will be extortionate, upwards of 20k+ depending on the lender.

Leveraging up this high for your first purchase will leave you unable to release future equity for quite some time and exponentially higher interest costs.

Back to suburb areas, I think you’ve touched on a key point with inner Bris – buying a unit might see you in a sore spot with all the increasing supply from new developments. I’ve stayed in Bulimba and the area is starting to certainly pack them in.

Depends on the State – I’ve bought properties from the SA government which they offload periodically. Most States have a system in place for selling off excess/unwanted stock to the public.

5 years is quite a long time to fix – which can leave you in a spot of trouble if your circumstances change over those 5 years.

Generally I wouldn’t advise a client to fix any longer than 3 years as it’s difficult to forecast your situation much further than that.

5.3% is an absolute extortionate rate too – many lenders are offering mid 4’s for the same period.

Indeed – you would imagine there will be an increase in the default when rates do rise in the future, especially those leveraging to the new peaks of the market.

As usual there are risk mitigants those people can take – ie fixing if they are exposing themselves to mortgage stress above x% interest rates.

DeanCollins wrote:

@corey, thanks for the tip. Interesting thinking….wonder if it will cost NAB some profitability…..
BTW is it just me or are other people really missing the Thumbs Up/Thumbs Down feature :(

Just about all the lenders are having to review their living expenses calculations, so this style of calculation will most likely become the norm in the near future – so I doubt it’ll be a localised issue for NAB. They still maintain one of the higher borrowing policies for borrowers with existing debt with other lenders.