Here's a really simple Cash Flow Analysis to help you understand.  In this example I want to use the example of a 400K property, completed, being purchased in SA.

For this exercise, I also want to assume you are borrowing 90% plus LMI, so your contribution is 10% of the purchase price, which is  40K  ( this is borrowed against equity)

You will…[Read more]

Not quite ,  I'm afraid. 

NRAS is voluntary.  To enter a property into the NRAS, an investor must enter an agreement with the NRAS "approved participant" ( sometimes referred to as a consortium) who is responsible for administering the NRAS allocation on their particular dwelling.  The agreement through which this occurs can take the form of a…[Read more]

There are 137 consortiums, and only about a dozen (actually, 14 I think) are actually approved by Genworth LMI and various lenders. To get approved, their agreement documentation has to pass the banks and the insurers scrutiny, which means no restrictions on repossessing or disposing of the asset in the event of a delinquency.

So bottom line is,…[Read more]

Troy is absolutely correct.  You get the Commonwealth Component (75% of the total $9981 incentive) paid to you by the ATO via your tax return, whether you have an income to offset it against or not.  A refundable Tax Offset is different to a tax offset. 

For the State Component ( the other 25% of the total incentive of $9981) it is paid by the…[Read more]

She is confused, Im afraid.

When the Commonwealth and State Governments issue  an NRAS approval for a dwelling,  it has an NRAS "entitlement " awarded to it.   The NRAS "entitlement" does not form part of the title, however.  It is simply an eligibility for the property to be entered into the NRAS.

Now,  here's where people get confused.  if the…[Read more]

INCORRECT!  Its a refundable Tax Offset- you get it whether you have a taxable income or not.  

http://www.ato.gov.au/nonprofit/content.aspx?menuid=0&doc=/content/00179876.htm&page=4&H4

You're talking about the QAHC model- which is unfortunately the most expensive in the market, and requires a 25% rental discount.    All other NRAS models have lower fees and require only a 20% rental discount.  I dont know why so many people choose to go with NRAS properties approved under the QAHC model, when there are so many other…[Read more]

The incentive sits at $9981. 

75% is paid via the Commonwealth, using a refundable Tax offset.
http://www.ato.gov.au/nonprofit/content.aspx?menuid=0&doc=/content/00179876.htm&page=4&H4

25% is paid via the states- http://www.ato.gov.au/nonprofit/content.aspx?menuid=0&doc=/content/00179876.htm&page=22&H22

This is not a fair comment.  Sorry.  Not trying to "flame" you, but you havent qualified any of your opinions…

Resale is not complicated.  same as any property.  What do you believe is more complicated?  Can you qualify your comments please?
valuations are done by lenders to determine suitability of the contact asking price- same as any other…[Read more]

Westpac, STG, Rams, Members Equity, BOQ, Resimac, Adelaide Bank, Bank SA, Bank of Melbourne, Bendigo Bank, Wide Bay Building Society, Liberty Financial  – all got to 90% plus LMI  for NRAS

ANZ, NAB, firstmac, the Rock Building Society – all go to 80% for NRAS

Adelaide Bank and Firstmac allow the use of the NRAS tax incentives for servicing- up…[Read more]

lamp1111 wrote:

Olauf98 wrote:
Hi everyone I'm a newbie. Apologies if the question has been asked before. Who are those lenders to borrow from as my understanding the big four are reluctant.

Hi Olauf98,I have asked Westpac and the loan manager told me that they do lend for NRAS property. Cheers,lamp1111

Ive posted on the question of NRAS…[Read more]

Kent Cliffe wrote:

luke86 wrote:
I disagree. Subprime loans were for subprime borrowers- being an NRAS property has nothing to do with the borrowers capability to repay the debt. I dont think this is a valid comparison. The tenants may or may not be bad tenants, but as the landlord you can approve who is or isnt able to live there so with…[Read more]

lamp1111 wrote:
Hi guys, I am so glad that I read Jamie’s advice before seeing the bank manager yesterday! The manager told me that I can borrow in two ways; 1. Borrow all from their bank; 2. Same as what Jamie told me J Initially, I didn’t quite understand why, but after further elaboration from you guys and my digestion system worked over nigh…[Read more]

Jamie M wrote:

euro73 wrote:
Anyway, it really bugs me when finance professionals bag non bank lenders on these forums.  Without them, none of us would have an industry,, there would have been far less innovation in products, and we would likely all be paying more. It's really a bug bear of mine so Im pedantic about making sure they are…[Read more]

Qlds007 wrote:
Michael i totally agree.I went to a breakfast meeting only last week at their HQ here in Brisbane and the < 50 Sq M product was mentioned as a niche product.I have known Kim Cannon for nearly 18 years back to his Nationale days and First Mac as they are now known after the amalgamation of the previous businesses has always been…[Read more]

Shape wrote:
Richard is correct, here is a bit of history lesson. Euro you are true when you say they are "securitised lenders" and technical speaking ( book wise) it' doesn't make sense for them to lend for such specialized security, but at the end of the day- they do…i can;t speak for all brokers; but my firm alone has placed many loan via…[Read more]

Shape wrote:
under 50 for living space – excluding the carspace etc…. Placed one loan via them before for a FHO in Chippendale- 44 internal with 10 for car space. And the LMI was placed via QBE- within their acceptable guild-lines of under 50 inclusive Euro- dont accuse till you have done the work. every deal is possible it just depends…[Read more]

Qlds007 wrote:
Hate to say Euro First Mac have the small under 50 Sq niche market for some time now.And on the commission front they used to pay Brokers 1.5% upfront with no trail (Couldnt tell you off the top of my head if this is still current) and no clawback so i guess for many Brokers made it an attractive reason to write FM…[Read more]

Cap B wrote:
They mortgage insure all loans.  – WRONG. No LMI to 80%.  This has been the case for many monthsHave high set up fees. – No dearer than other Non Banks. Yes, dearer than banks, but then again- non banks dont have other revenues. Have high exit fees. –  No dearer than other Non Banks. Careful what you wish for when DEF's disappear. [Read more]

Shape wrote:

Runway wrote:
Hi Jamie,The broker said that they offer 'flexible' products and low interest rates.Upon investigation though, it seems their products have high ongoing fees. I wondering if this is done to offset the low interest rate.To me it's just another product. However, it's one thing to use a 'flexible' product and another to…[Read more]