Forum Replies Created
Hi Johann.
Agree with John – in the sense that you need to be comfortable with the commitments. It's great to own multiple properties, but if they cripple you financially, it aint worth it.
However, Im a big believer in turning money into money. 20% equity in property can get you off and running with another property. You dont need to look big, start with an affordable budget and move at your own pace. Personally, I thing that waiting to pay off personal debt stunts your potential. I take my hat off to anyone your age who's in the market, look what you've accomplished at just 23, a few tough years can make a world of difference later in life… trust me!
Rob
CJ, depending on loan size, a few good ones to look at:
Bankwest – 7.35% with 100% offset (7.30% for > $1m)
ANZ One – 7.37% with 100% offset
Westpac – 7.37% with 100% offsetAlso, limited lenders allow 100% offset on a fixed rate, 7.35% 3yrs, which interestingly enough also has a redraw facility (not common with fixed rates)
Hope this helps.
Rgds,
RobCabo, can only agree with above. Westpac do many things the hard way. It should be the security nature that determines where the application falls; consumer or commercial
Commercial security, whether it be an individual or corporate/trust borrower will be treated generally over a reduced term, 15-20yrs, with rates on average 0.5-1% higher than resi.
Also, some “trading” corporations may still be treated as commercial. If you have a large trading company, they will not always be entitled to receive traditional products even if it is a resi security. They are generally happy to entertain structures such as companies and individuals where they are trustees for a trust, when it’s for a property trust or property acquisition purposes.
I find CBA, Bankwest and ANZ very good to deal with, but ANZ dont offer their full suite of products (breakfree/prof pkg…). I’d suggest flick Westpac if you don’t want heart-ache!
Cheers,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
Redwing, thanks for the introduction. My Fantasyworld Mortgage Specialist has just given me the approval to buy Brazil! Even more, the first 75 years are to be interest free! I love their “wink wink” contract-free “can do” attitude!
Rob
Rob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
Hi Lawrence, look at IMB (illawarra Building soc) have set deals with them to 75% quite comfortably, must be arms-length, nothing speccy, also paramount mortgages will do 80% need be (havent used them) but looked seriously a few times.
Regards,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
justgjt, it is the opinion of some banks that this area (as Richard aluded to) can be hard to market for a quick sale.
However, I am WA based and have just returned from Karratha last week presenting the changing views of some lenders in this region to real estate agents and builders. Obviously with you having some knowledge of the region, would understand the positive outlook going forward of this area.
As such in short, there is now scope to borrow 80% without Mortgage Insurance and in fact as high as 95% with, so the times of old are exactly that. And no, this isnt looking at subprime lenders and paying exorbitant rates/fees, we are looking at banks!
Drop me a line if you’d like any further info, I have many clients from the pilbara and know the area fairly well. You should be able to obtain 80% almost anywhere now without LMI, there have been some recent enhancements.
Hope I can be of some help!
Regards,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
Achw, also, when looking stay away from the lenders offering super low rates, they’re generally an intro rate, reverting to a standard variable or higher rate after a specified period time (6-12m). They will generally always be more expensive compared to an overall lower rate upfront.
They will have exit fees and/or other costs if you choose to change over after the initial period.
Comparison rates were introduced 2 years ago so consumers can compare lenders on an apples with apples basis. If you’re looking at individual loan products, ask the lender/broker for their respective comparison rate, this allows you to break them apart.
In saying that, comparison rates can be manipulated, as they dont take break/exist costs into account.
If you want more information, best to speak with a broker, than a bank, as we are licensed and must comply with legislation around rate quoting, so they can give you a far better idea of what the true cost will be.
Regards,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
Dallasm, vacant land is not a security many lodoc lenders will accept. Also, the few that do, will limit the LVR to generally 80%
I know of some that will do 90% on vacant land as lodoc, but will charge higher rate/fees, something you said you werent prepared to do.
I tend to agree with Simon, if you’re pushing your limits with servicing currently, going further into debt wont help. Also, try to increase your equity position to 20-25%, this will open up your options when you are ready.
Regards,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
Great idea John. This is the enthusiasm and interest that I enjoy most on this list. I wish you well in your endeavours to financial freedom!
It is good to talk with likeminded people, it helps solve problems. I have had some good advice from people on here so I hope you are able to find people with similar aspirations as yours to help you achieve.
Regards,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
ET, Stu’s pretty spot on. Minimum 2 yrs under your belt and generally accepted by most.
However, if it’s paid quarterly or even monthly, dependant upon the type of work, it may be considered as “prop up” income to mitigate a shortfall in servicing and you may have success with even as little as 12 months, however would need good confirmation of this.
Lenders normally scale down the percentage of this figure to as low as 30%, depending on the nature of it, because of the potential of irregularity and dependancy upon the employee’s performance.
Hope this helps,
Regards,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
ned, if you just amortise/reduce the loan to within 20% within 12 months, you quite possibly wont get it. You’d need to close down / terminate that loan contract to stand a chance.
If you setup a new loan with your bank to payout the old loan, you wont pay stamping again, standard fees/charges, however may be elegible for rebate. Again, check with your lender.
Regards,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
Unfortunately, the only way to have one loan is to break the other. However, you say you’re fixed at 6.79% enquire with your bank the “ERF” or Economic/break cost of the fixed rate. You may find it may be negligible if any at all. However, generally in a falling market the exit fee increases (as the lender would prefer you to remain at a higher rate).
Regards,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
S.O. lodocs are an option, however most lenders only recognise lodocs with an ABN being registered 2yrs or greater and usually to a maximum lend of 80% (or 82%) Im assuming neither of these are options?
So unfortunately I think you may be dead in the water because of the LMI and ABN issues. However, saying that, I do know of a lender that MAY entertain this, collins – a mortgage manager, have some quite interesting policies. You will pay a premium rate however (+1.5 on SVR? at a guess)
If you’d like me to have a closer look, message me off list (pm/email) happy to see if I can point you in the right direction.
Regards,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
Hi Kwaidan,
not sure if you’re earning any income in Aust (ie: lodging an Aust ITR?).
2 options – throw down all deposit to minimise mortgage and respective repays – look at i.o vs P&I, depends upon your strategy. Being non-res, the IP really wont provide too much benefit to your o/s income. Not sure about Japan and their tax laws, but if your rental income is being paid into an Aust. bank account, whether they consider o/s income in their itr (or their equiv)
second option, borrow to the hilt (80% or even 95% with LMI), throw all your cash into an offset. End of the day, more expensive option, int accrued will be similar to option 1, but reserves the option to treat as an IP when you eventually return, you can simply withdraw the cash if you chose to buy another PPOR and keep this one, thus loading up your IP and reducing your PPOR debt. Otherwise, simply dump your offset money into the loan upon your return if you choose to occupy.
I know you said you would possibly move into it, but 5 years is a long time and it’s something maybe to consider as a lot can change in just 3 years!
It really is a question for an accountant, having it P&I and repaid to live in upon return is a nice welcome home present, but your accountnat will advise whether it will be to the detriment of your income tax return. The fact you have saved $200k in a bank account alone suggests you earn too much money and should share it with the rest of us [biggrin]
Regards,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
Sampson, this can be handy! If you’re selling through an agent, the agent can use it as leverage to potential buyers, by stating that if they ring “Bill” and are elegible for finance, he will present their offer to the vendor (yourself) in the best possible light. They dont necessarily have to proceed with Bill’s finance.
Helps weed out the tyre kickers and keep you close to the transaction.
I make it a condition on when I sell a property that they must be qualified prior to offers being presented. I being a LFB in WA cannot qualify them myselves due to obvious conflicts of interest, but I have a colleague test their elegibility and integrity before we entertain negotiating the offer.
If selling privately, it may be a negative as you must eyeball the potential buyers directly and this can be an intimidating condition that they may not like, whereas through an agent you have that intermediary who is seen as “independant” by the purchasers.
Overall I think it’s a smart move, provided your broker complies with disclosure laws in your state and adheres to privacy regulations.
Hope this helps,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
Maruco, it’s the land component that you want to “hold” as long as possible. Improvements on land, in this case a dwelling, are a depreciable item. Although property prices increase over time, the dwelling in fact does the opposite. Bear in mind, all properties will require maintenance, it’s like buying an old car vs. new car. If you hold it long enough, it will at some time require maintenance.
Buying an older home is not a bad strategy if you’re handy, as the repairs and maintenance may be marginal initially. If you plan to treat the property as an investment, the upside is, the renos/repairs are a deductible expense (refer your Acct for full taxation disclosure).
Another point to note, buildings (along like business chattels) can be a depreciable item!
Someone correct me, but I think it was from 1985-87 (whenever Keating was in power) Negative gearing was temporarily abolished, but the government introduced a 4% allowance for homes built in this period of time. After this time (1987-now) all homes can be depreciated at 2.5%.Again, these dates are just my memory of the events, but again check with your accountant. If you hold a property long term, you may also benefit from future zoning changes. An example, purchasing a 750m2 block and home in an r15-r20 district, would enable only single dwelling construction, but as the urban sprawl extends and the population thrives, councils and locals are always lobbying for changes to zoning. I’ve recently seen (2 years ago) a whole section of Rivervale change from R20 to R40 and even R60 in stages, I can tell you, it was a developer’s dream!
So, long term hold is a great strategy, as land is the precious commodity; the more you have and the longer you hold it, the more people will want it and be prepared to pay for it!
Hope this is of some help?
Regards,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
Another option, if you’re chasing a prof package purely for rate discounts and offset, Macquarie offer a fairly good product, they offset on their basic product, giving you a fairly competitive rate without the annual fees. Also, lenders offering fixed 3 yrs with offset AND redraw on the loan.
Prof pkgs have their merits, but sometimes are over rated. I think their niche is for people who are going to be continually borrowing over a short period of time, as you will save on bank fees by doing so.
The basic loans and fixed loans offer much more than they used to and in a race to offer the best, many lenders are enhancing their product features considerably on their bottom level products, which were priced cheaper initially because of their lack of features.
Any queries, dont hesitate to ask!
Regards,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
Serviceability is always the problem when you adhere the buy&hold policy.
Banks become more and more conservative the more your exposure increases. Some banks limit borrowing percentages, lower than 80% as your loan book with them grows.
One of the biggest traps, is cross-colateralisation. A mouthful, but simply put, the banks cross-lend one property to another. It is often needed when equity is light on, however depending upon what stage you’re at, it could be time to help out your problem.
I have many clients with 5+ properties, this is always the biggest issue I’ve found. The simple way around this problem, is to free up a property where possible from your lender, thus giving you clean title and more importantly, a clean break! You will find your options far more open to the next lender. Westpac for example, disadvantages their clients, by loading a further margin on top of their normal margins, to whatever you owe them. So, you can take your application to the next bank and have all the options open to you again and you’ll find most lenders will take your current repayments as is, without loading margins!
Also, freeing up equity to do this ensures the new bank is taking on initially a low-lend and being new business are often open to negotiation and gentle persuasion from the broker presenting the application.
It’s unfortunate but true and I guess follows the old die hard saying, “Don’t leave all your eggs in the one basket”
The other option, ask you boss for a payrise!
Hope this helps,
Regards,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
Also referred to as lite doc or easy doc, they refer to the application paperwork. Even still, it’s not exactly reduced much !
Another main difference worth noting, is lo-doc loans are offered by most banks and lenders in one form or another now. Banks and lenders securitise their loan books with these sorts of loans, which requires mortgage insurance. The borrower may be liable to pay the premium, even if borrowing only 80%, however it is a far reduced premium to that lower-deposit borrowers (90-95% lends) would experience, with the premiums only being 0-48-.6% on average (plus your state’s stamp duty)
Some lenders carry the cost internally, but most will ask the borrower to pay it when borrowing between 60-80%. Also, lo-doc loans can even go as high as 90% with some lenders, but as you can imagine with the increased risk, so are the fees and rates.
Lo-docs can be dangerous, as the fall back of your disclosed income (albeit unverified) can become a skeleton that may one day come back and bite you, the Fin Review have run 2 articles in the past 3 months (if anyone would like a copy, let me know, I have it… somewhere) about the ATO and their attack on lo-doc borrowers. As you can imagine, when a borrower is stating one thing to a lender then declaring a drastically different figure to the ATO, they get interested.
So, the only advice I can give and Im sure the other brokers in here would agree, wherever possible, take the option of a no-doc loan over a lo-doc, as you can rest easy knowing that you will never have to justify figures you didnt declare in the first place!
Hope this helps.
Regards,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
Hi Burlboy, as Megan and the others have alluded to, equity can be redrawn and made availanle via a line of credit or fully-advanced term loan.
Unlike the rest of the country, our WA market still appears to be very strong even in the rural and south-west area. We just settled on an IP in Busselton 2 months ago and still amazed at the interest in the region.
Regardless of the performance of the r/e market, it’s what you then do with that equity in the form of the stock market that will determine it’s overall performance. Also, as your accountant will better advise, if set up properly, you can offset your borrowing costs against any CG or profit(s) earned on your new investment.
Hope this helps.
Regards,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
