LVR is more of a factor for desktop vals than loan amount/property value. Desktops can be quite favourable, but there are quite a few times where they come below fair value. Most lenders have processes in place however to upgrade these vals to drive bys/full vals if the broker requests.

Not a problem Charlies, I’ll let the organiser to put down a +1 for you.

Hi Charles.

The Adelaide meetup group generally meets towards the end of the month, on a Monday evening. It’s on the Somersoft forum:

http://somersoft.com/forums/showthread.php?t=84714&page=11

Last meetup had investors from SA, WA and NSW all come down.

Hey Magic,

You’ll only need to show 5% genuine savings via a three month transaction statement within LMI territory for most lenders, some won’t require this sub 90%.

Changing employers also won’t be a huge problem if its a permanent role. if you have a probationary period most lenders will want to see you off it first.

Lenders will take into account a 100k gift from parents, they will generally want to see it in account with a signed dec from parents stating that the funds were a gift.

They should be able to provide information regarding why the build val has come so far below, especially with regards to price per sqm. Request info regarding this and find comparables to reflect the val your friend needs.

Everything else is just static, it’s unfortunate that it’s happened – time to resolve things now.

Just a cash grab. The same services are being provided to owner occupied and tenanted investments, so rates shouldn’t change.

It would be different if this was a private sector service, but this is a local government charge. You should not be slugged more for a service without adequate justification – which does not include ‘they can afford it’.

Market economy, as DT has mentioned – if there is the potential to open an agency running on lower margins as their point of difference, it will most certainly emerge. Some of the business administration costs in WA are quite high.

Not the best situation!

Generally it’s adviseable to put the land + construction finance in at the same time, to avoid these issues – though usually it’s the land coming under, as opposed to the build. The 2yr fix is going to act as a further anchor.

Did he pay LMI? If he settled on the land recently and his fixed rate reflects the current ADL bank rates available, he *may* be able to exit his fixed rate without cost, refinance to an alternative lender who will accept the H&L value.

If he can’t break the fix without substantial cost, has already paid significant LMI or a combination of the two, he’s in between a rock and a hard place.

Thankfully Homeside have a decent upfront valuation process.

Homeside for an initial lender isn’t ideal, as they are generally best suited for mid term, end term investments where serviceability is drying up amongst the conservative-mid range lenders. The second property might be a good chance to diversify into a more appropriate lender if you’re looking at growing a reasonable size portfolio.

I wouldn’t pay the apartment down any further. Instead place these funds in an offset account to be used as deposit funds for the townhouse. I assume otherwise the full deposit amount will be drawn from equity, meaning you have a minimal deductible debt and maximised non deductible debt – not ideal.