Forum Replies Created
We tend to disagree with the p&i theory.Just because you have an IO loan does not mean you cannot pay down the principle. It just gives you a choice if you have a flexible mortgage that allows extra repayments.
If you have a PPOR perhaps use the surplus cashflow from the IP to pay down your PPOR first(non tax-deductible debt), then work on the principle of the IP’s?
We feel the the P&I feature of any loan is too inflexible therefore always recommend IO.
Another reason to keep the loan IO is that it establishes a limit that you can redraw back up to(presuming you had this feature) and even increase with capital growth and new vals. With P&I your limit decreases over time.
Another point, at 90%($40500 lend) your LMI would only be about $900. Why not spend that to put in $4500 less on a deposit? IO on a $40500 lend at 7% int rate is about $235 a month.
Just my 2 cents
Brendon
Acute Mortgage Reductions
‘Better Finance for More Homes Sooner’Hi
I have read John Fitzgerald’s book and he makes some important points. He has become wealthy over the years as a developer and does some great things for homeless kids on the charity side.
However I did go to one of their introductory seminars. They were initially keen to tell me about their properties for sale and take down my details but when I challenged them about the -gearing they push, their attitude changed and I never heard from them again.
As far I can see they try cater for busy professionals who want everthing down for them.
Not for me I think.
Brendon
Acute Mortgage Reductions
‘Better Finance for More Homes Sooner’Interesting
Thank-you for the other side of the coin!
Brendon
Acute Mortgage Reductions
‘Better Finance for More Homes Sooner’Good point Max
Was it ING that ended up knocking it back or a mortgage insurer?
Brendon
Acute Mortgage Reductions
‘Better Finance for More Homes Sooner’Shouldn’t this post be in the ‘Opinionated’ section?
Brendon
Acute Mortgage Reductions
‘Better Finance for More Homes Sooner’Just to briefly touch on getting pre-approval for finance first.
Make sure you get something in writing from your chosen lending institution, before you go signing unconditional contracts.
I’ve seen a few situations recently where a prospective buyer has gotten a verbal agreement from their bank for finance only to find that after going unconditional the bank has rescinded their offer.The consequences can be pretty nasty.
Regards
Brendon
Acute Mortgage Reductions
‘Better Finance for More Homes Sooner’Hi
I have been to Geoff and Paul Eslick’s Reno Kings seminar and thought it was great. As Steve said they are down to earth guys, and their passion for property is infectious.
You can’t go wrong with Geoff’s book, between the 2 of them about $20m in about 8 years(not bad) so they have the experience.
Brendon
Acute Mortgage Reductions
‘Better Finance for More Homes Sooner’Hi Bruce
Good idea, that is the path I am looking down too, although there are a number of factors to consider.Personally I am taking my time to learn all there is to know about the development side before doing one myself.
A common problem is that there are a lot of small developers out there with existing relationships with local agents. trying to get them to call you first on a deal is difficult.
Another factor you need to consider is that it can be a lenghly process, so you need to have some spare cash in case of setbacks. And in terms of finance, you cannot get a high LVR lend on developments as they are seen as riskier by the lending institutions.
I would recommend finding a couple of small developers who would be happy to share their time and knowledge with you, possibly in exchange for a bit of research on your part.
Good luck
Brendon
Acute Mortgage Reductions
‘Better Finance for More Homes Sooner’Another point to bear in mind is each individuals investing goals for the next year or 2 or 3(whatever term you’re looking at fixing it for).
If you’re looking to access equity and purchase more property over this term then a fixed rate mortgage will not allow you facilities such as a redraw to access that equity(or a limit is imposed).
Depends on each individual’s circumstances. I prefer to keep my loans variable for the flexibility alone to pounce on any deals when they come up.
At the same time there is also the possibility of a split with part fixed and part variable.
Brendon
Acute Mortgage Reductions
‘Better Finance for More Homes Sooner’Hi Ronulas
Once you’ve found out which valuers are on your chosen lenders panel, you can still employ them yourself (thereby ensuring a full thorough valuation) and have the Val assigned to your lender.
Do your own research, chat to the valuer, and show him/her your info. Some will appreciate the help(others will not)and give you a fair Val as apposed to a quick $150 driveby.
Regards
Brendon
Acute Mortgage ReductionsHI
Interest only also doesn’t necessarily mean that you cannot pay off principle, but it does give you the option not to if you want to allocate the surplus funds elsewhere such as Terry has suggested.
Regards
Brendon
Acute Mortgage ReductionsHi
I have a friend who used to work for them, don’t know too much about them except that they teach you general mortgage reduction principles. Not sure how much they charge though for their services.I think they also act as mortgage brokers but can’t substantiate that. Let us know after your meeting?
Personally I think you could probably find the same info in a lot of good books or on this forum.
Can anyone suggest any good books on basic mortgage reduction principles? Can’t think of any off the top of my head.
Brendon
Acute Mortgage Reductions
‘Better Finance for More Homes Sooner’Kramer
Sounds like you have it sorted and are on the right track.Better to check on the status of the location of Parklands, as you may run into a few lenders who will not lend 80% on inner city apartments.
Good luck!
Brendon
Acute Mortgage Reductions
‘Better Finance for More Homes Sooner’Hi Terry
Yes, Kramer should be able to lend on valuation as it will be more than 12 months.
For those of you in Brisbane though, is the Parklands development classed as a Brisbane CBD highrise?
If it is, I would imagine Kramer will have a hard time getting 90% LVR from any lending institution?
What are your thoughts on this Terry?
Regards
Brendon
Acute Mortgage Reductions
‘Better Finance for More Homes Sooner’Hi
I agree with Stuart, although someone who could give you more info on keeping it all under one account is Margaret Lomas (www.edestiny.com.au).
Saves on account-keeping fees but the bank will be licking their chops at all the cross-collateralisation.
Regards
Geronimo
‘Better Finance for More Homes Sooner’Apologies Kramer
I lie! You could more than likely borrow the costs too!
Brendon
Acute Mortgage Reductions
‘Better Finance for More Homes Sooner’Hi Kramer
As far as I can see you cannot access any funds from the Parklands property yet, not unless you are able to substitute the deposit you paid for a deposit bond now, but I would imagine the developer (Pradella) would not want to do this.
Nevertheless, I could organise you a 90% mortgage with the 10% deposit made up from a personal loan. Effectively 100% finance, you would just have to come up with the costs eg: stamp duty, mortgage insurance etc.
Feel free to e-mail me on [email protected]
Regards
Brendon
Acute Mortgage Reductions
‘Better Finance for More Homes Sooner”Hi Kay Henry
There are many different variables and ways to go about getting finance for a property as I’m sure someone of your experience knows.
The Loans Officers and Credit Officers at the banking insitutions generally are not experienced enough to think outside the square (and they are not paid to) so the applicants get put through some computer software system and out spits a ‘YES’ or ‘NO’ answer.
Any other brokers out there who would disagree that how you put together the application is vital to the approval/rejection of the loan application.
I believe brokers have a responsibility to the clients to do more than just get a loan for them. Strategising and coming up with better long-term Finance options to help clients achieve their goals should be part of the service.
Brendon
Acute Mortgage Reductions
‘Better Finance for More Homes Sooner’Freedomfinder
Are you sure you’ve exhausted all ‘conventional’ avenues in going Full-Doc before you go down the Lo Doc path?
Drop me a line on [email protected]
and I’ll see if I can come up with something creative for you. Sometimes it just takes a little lateral thinking, and how you package the application has a lot to do with it.Brendon
Acute Mortgage ReductionsHi Terry
Have you investigated some of the smaller lenders that don’t use brokers?
Surely there will be a few out there? May come at a price though. All fine and well getting the 95%, but if the mortgage is not flexible, it will not help in the long run.
Our lender will only do 90% but if meant they would lose the refinance, I reckon we could push for 95%
As for the personal loan, what if you apply for it after the pre-approval at 90%?? Need a non-conforming lender who doesn’t require proof of savings.
Regards
Brendon
