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Yeah that is a lot of LMI to make the investment work. Did he try getting a valuation on your home from another lender?
Yeah guys we are going the same direction as Genworth in other countries.
Check out Genworth's premium rate card for the USA and you will see what I mean.
Both mortgage insurers are having problems with capital allocation. They both want to limit the amount they are underwriting but they just can't do it when they have big banks on their books who have DUA and are trying to write a ton of business. So instead they are doing little tweaks to policy, playing with credit scoring and of course loading premiums.
Developments can be completed in stages with some sections registered before others. However with it being shops and units above them I really doubt that this would be the case. It would all be done in one go.
From what I've seen with my clients it tends to be the sophisticated investors that do very well from vendor finance. If you are good at negotiating and have a sound understanding of real estate and credit risk then it is a good strategy.
If you are time poor and inexperienced I would steer clear of it or find a good mentor.
Good luck!
I'd say any normal building inspector would be able to do this and complete a comprehensive report. I haven't come across too many building inspectors that do a terrible job.
Unfortunately many people have issues with building defects. It's really important to keep an eye on the builder during construction and to make sure that anything that is going to cause a problem down the track is addressed right away.
Yeah it is a tough one as if banks stop payments that would take someone over the limit then this causes other problems. We often hear people complain that they had $10k in cash in their bank account and their bank declined a $30 transaction on their credit card. Also a lot of customers get embarrassed when their card declines.
It would be great if they gave you the choice to have it either way. I guess that isn't always possible with their systems.
It's fine as long as you discuss your future plans and you are on the same page. E.g.
- How long to keep it?
- What happens if one person wants to sell?
- Who is paying what?
The most common situation that I have seen where there has been trouble is where one person wants to sell, the other wants to keep it… but doesn't want to buy out the other party. If you have an agreement up front that if one wants to sell then the other has the option to buy out their share, otherwise the property will be sold.
Your dad will likely pay stamp duty on 50% of the value of the property just FYI. Not hard to do the legal stuff, just a transfer document any conveyancer can do.
My understanding is that the 6 yr absence rule would still apply and that yes you can buy another property… as long as you don't move into it.
That being said I'm not an accountant. Hopefully someone else here is and can confirm that for you.
We refer our clients to Lucas Lopez at Lucentor. He's good with small business, smsf & investment properties. We got him into our office recently to train all of our brokers in the tricky details on how tax works for investment properties, we were quite impressed.
Unless the loans are fixed it is best just to keep it simple and apply for a new loan on the new property. Trying to get the bank's backend system to allow it is more likely to be a challenge than their policy not allowing it.
We never give any recommendation without first having the entire picture and supporting docs. It is common sense.
You wouldn't go to a doctor and ask them to prescribe you something without first asking them to investigate your symptoms. We can't give accurate, quality advice without the entire story. It is counter productive and is a waste of our time and our clients. In addition to this the NCCP Act requires us to "make reasonable enquiries" and take reasonable steps to verify a clients situation before we make a recommendation of any kind.
That being said it is frustrating for you I am sure. That is why we will be able to say "it is likely we can get you a loan with a major lender at an interest rate in the range of ___ with terms such as ____" at an initial stage, however any more than that requires the full story.
A couple of lenders can go up to 95% for company title however you must meet very strict criteria. Clear credit, 5% genuine savings minimum, 2 yrs + in job, must be a purchase, must be in a capital city and the valuer must like the property that you are buying. Otherwise 85% is the max
Technically they can go to $2.5m at 95% however good luck getting anything actually approved at that level! We have done a couple just under $2m at 85% or 90% however we haven't tried our luck for any higher LVRs around those loan amounts.
Hi Maree,
If you use one of the major valuers then you should have more lenders willing to accept the valuations. They need to be reassigned to the lender before the lender can accept them and those valuers must be on the lenders panels.
You can ask the valuer which panels they are on before you order a report. FYI that doesn't mean that those banks will accept that valuation. Often valuers are on the panel with the commercial division but not residential etc. Also in some cases the valuers know how to do a valuation for a particular lender but that lender doesn't use them anymore. So yeah it is complicated.
Best to keep it simple and order valuations up front, most mortgage brokers can do this.
CBA are not great for trusts anymore.
A few pointers for CBA trust loans:
- They will take income from directors of the corporate trustee who are guarantors.
- They will not take income from beneficiary guarantors, except in exceptional circumstances.
- They no longer like to do the loan in the name of the directors and have the property in the name of the trust.
There are plenty of other lenders that can do this without problems.
Last I heard of Broken Hill was that it's days were numbered. Personally I wouldn't invest somewhere that may be a ghost town in 10 – 30 yrs time.
Some banks specifically have restrictions on lending to Broken Hill, that tells me all I need to know.
If you are going to invest there then assume the value drops to $0 over 30 years and if your investment strategy works from just the rent income then there may be some merit to it.
I couldn't agree more with Shahin. Know where you are going and you are much more likely to get there.
Once you know where you want to go then talk to a mortgage broker to figure out what is possible and what you will need to do to get there.
There is one thing that you can start with that certainly will not hurt. Open a savings account and deposit part of your pay into it. This will show a savings track record which in time will make it easier to get a loan. Aim to save 5% of the purchase price of the property that you want to buy.
It isn't absolutely essential, there are a few ways around saving a deposit however it certainly makes it a lot easier for you and gives you more options!
As a general rule pay off any non-tax deductible debt first. I'm assuming you don't have any of this since you have $20k in offset.
Then pay off your most expensive debt. So if one of the loans has a higher rate then this would be the one that you offset with your funds.
Buying a PPOR is a personal decision. Of course you need to think about it from a financial point of view, the majority of the decision should be based on your needs / your lifestyle. After all that's what matters right?
Macquarie pulled out of the mortgage market a few years ago however their existing customers were always on relatively good interest rates. The exception being their customers with low doc loans who did have their interest rates increased.
My dealings with Macquarie recently have been good and it really looks like they really want business and are committed to the mortgage market. While there is never no risk, I don't think Macquarie are a high risk and I recommend them to my customers when appropriate.
FYI since mortgage exit fees were banned you don't have to worry too much because if your lender plays any games with the rates you can just refinance. The exception being if you have borrowed over 80% of the property value and have paid LMI. You will have to pay LMI again to refinance.
Like the others said don't just look at the rate. Banks are moving their rates all over the place at the moment so the rate you get today may not be competitive in a couple of years time. The key is to monitor your rate or have your mortgage broker do annual reviews.
If it is housing for people over 55 years old, it is torrens title / strata title (NOT LEASEHOLD) and is not part of a "retirement village" being a specialised community living style development then it can be financed with some lenders.
If it is leasehold then it cannot be done unfortunately. We managed to finance one leasehold property at 30% LVR recently via a private lender at an incredibly high interest rate, however aside from that I am not aware of a lender that can do the leasehold ones.
