Richard and Jamie,

I am with Bankwest now and just wondering if what I’m doing is right.
I have been told by the mortgage broker that i will not need to pay the fee for valuation suppose the value of my home is lesser than what I need to borrow. If it is more then the cost will be capitalize in the loan.

Yes, I’ll check that with Bankwest, because my current loan is just Home (P+I) Loan not the investor IO loan.

Cool, Thanks for the reply JacM

I’m with Bankwest and yes I’m still on the special rate (1% discount) until june 2012
So I was wondering if I should be paying for the valuation or it should be no charge at all.

Thanks for the reply Terry and Richard.

Richard,

Thanks for the advise, from my understanding is that the broker told me to pay for the bank valuation fee if the value of my property has gone up greater than the buying price. So if it doesn’t then I do not have to pay for any fee.

yes the TGR Property is a very good compendium of smaller books to give you a bigger picture of what to expect in property investment world.

Yes I’ve been to the seminar today and I got the copy of TGR Property book. it is very great book to read which opens my mind to invest in property now.

I wonder what is the other book contents eg. TGR Cashflow

AH IC so that the interest generated from this LOC account can be tax deductible.

Terryw wrote:
Also, you should be taking IO so that you could be paying off your PPOR faster. Or if you don't have one so that you can save up for one faster.Once you have paid off your PPOR you can then start paying down debt on the investment properties as well. (or save into an offset and then have the choice of buying more or paying off…[Read more]

Terryw wrote:

Henry Adams wrote:
, so does this means the only way to pay it off is to make sure that the IP is always double in value every 10 years ?

Imagine you had purchased a house in Sydney 30 years ago for about $30,000 and you had only ever used an IO loan. You would still owe $30,000 today.Now what would you expect to pay in rent for…[Read more]

Shape wrote:
It all depends on your overall strategy…easy for me to say but ill give you an example.

Mr and Mrs smiths strategy is to make $100,000 in capital growth…to further invest into another IP.

– 2005 buy a $400,000 property with I/O to improve cash flow so can purchase another IP sooner etc…
– Since it was done as I/O rent = so…[Read more]

Terryw wrote:
This is how I would do it.Value x 80% = X                           e.g $300,000 x 80% = $240,000X – Existing loan = LOC limit         eg. $240,0000 – $150,000 = $90,000 LOCSet up the LOC on this property and only use that LOC for deposits and costs for the next property.Buy $300,000 property. Get a 90% IO loan of $270,000 and tak…[Read more]

Jamie M wrote:

Terryw wrote:
Henry, what is a "semi fire-walling method"?

Good question. Is this in one of Steve's books?Do you just mean setting up a second loan against a property which is used as  the deposit/purchasing costs on another – and then you source the remaining funds for the second property from the same bank or another? This…[Read more]

Shape wrote:
Hi,

This is the first time i heard of this term….reading your response it doesn’t make sense…if the borrower is having financial problem with one of the loan then they most likly would have problem with the another one as well given it’s with the SAME lender and SAME security? just a different loan…[Read more]

SallyFarrow – YourShare.com.au wrote:
Hi Henry,

Some other good questions would be:

What is the best suited type of loan with features such as offsets, redraws, etc
What the best rates are and what are the restrictions the lender enforces for those lower rates (no self employed applicants etc)
How much the broker is being paid for your home…[Read more]

Tommy1 wrote:
Looking for a few idea’s in how to structure the finance for my next few properties.
Situation is as follows:
PPOR value $275,000
Owe $45,000 Principal/interest
Equity $$235,000
Cash $20,000 (would rather not use any of this. Currently sitting in offset account on PPOR, PPOR loan is therefore effectively $25k)

IP1
value $300k
LOC…[Read more]

Terry, sorry to cause confusion around.

the term firewalling is when we set a loan after we have enough equity and transfer it to another bank.

semi firewalling is when the bank/lender is the same (within the same bank) but the loan is split across two different facilities, therefore with both method if somehow the borrower having difficulties…[Read more]

Cool, thanks for the reply Michael

Shape wrote:
More hits = desparate ( as Terry mentioned )

MOST ppl once they get their first approval- they normally go with that.

Normally 2 outcomes with active credit file
1. You got rejected by the another banks (something to hide? something we don’t know?)
2. You may have gotten accepted but is shopping around on your own accord – so why…[Read more]

Thanks Terry for explaining to us about that.

Cheers,

Henry