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Fairly straight forward
-Find a qualified mortgage broker(like a few on these forums) you are happy to work with and let them
go to work for/with you.
They do it day in day out, may as well leverage that experience.Personally i don't worry where the money comes from (which bank) as long as it keeps coming!
Well said angelinsydney
Short term gain for someones else's pain is far from worth it.
As for buying and renting back to original owner, having a professional property manager would be a good way of separating the relationship a little and keeping it professional to minimise the risk of sour feelings?? Third party to handle payments also takes away a link??
Just my two cents.
Not knowing your situation fully, its a bit fuzzy.
Its not always said very often however it does need some thought, – The current economic climate.
If the house prices are stagnating it could be worth thinking about P&I.( ever so slightly pay some down)
If the prices were growing fast you would not hesitate to go IO as the growth in prices with earn you equity and
increase your wealth.In saying that all the posts above are really well said.
Any thoughts?
Hi Banker
Well said.
You are correct. That would be a good example of the 5-10% of the time it might be a better choice of finance structure.All depends on the usual suspects-, personal circumstances. Income amount & type, equity, credit worthiness…..
Let any of us know if they need specific quotes etc.
What a topic to get people talking!
Its got to be a 90%-95% sure thing CC isn't a great idea with most people.
If your excuse is extra paperwork-YOUR LAZY.
Banks are finance institutions, they make money from lending money, not necessarily helping you grow your portfolio. They are only interested in making margins from loans and having more control(which they have gained in the last two years by gaining more market share/control)- is a great thing for them. Actually voluntarily giving them more control is ludicrous.
I'm sure i don't want one institution having the controlling say on my investment portfolio. I would rather be insane……
It make the most difference when something goes pear shaped(as noted in above posts) who do you want looking after your best interests? Your finance broker who can do some tweaking to many small loans or a bank "manager" who has to report to his credit department who work from computer calculations and margins etc…….
I even wrote an article about it….
http://investment-mortgages.com.au/loans/dont-cross-collateralise.htmlHI Rishi
The popular brokers on this forum are pretty good as you may come to figure out.
Just always use a broker that has enough turnover you will not get biased results with them trying to for fill the minimum loan writing requirements with certain banks. Some smaller brokers may not for fill these easily.
Hi
isnt this a finance forum?
Surely this is rubbish.
Its even been optimized for keyword densityCalling moderators…..
I think it is also worth doing a worst case senario also.
Protecting your assets is just as important as building them up.Do few examples,
The Investment property is unrented? Who pays the gap?
You lose your income? Who pays?
Your parents hit a pothole? How are they covered?
The place burns down? Will insurance cover?Im in no way being negative, you are far smarter than 96% of your peers for taking action.
Just cover all bases!Like the saying goes,- Prepare for the worst, However enjoy the best!!!
Your in the right place, this forum is very powerful for grouping intelligent minds!!
Research Research Research.
Once you have found an area and a location in that area you will start to know which properties are high priced or low priced.
You are then positioned to negotiate the best "bargin" and effectively buy at a discount to the market.You make you money on the way in(buying) not on the way out(selling) by way of creating an opportunity(renovator, subdivide, develop).
Once you have researched your area you will know which properties are then a good buy and may not need negotiating tirelessly.
If the numbers stack up- it stacks up.Agents can sometimes be far better negotiators than ourselves so it pays to utilize their skill set.
Yes agreed with Duckster
The banks wish for you to pay your loan down(reduce their risk) and then it becomes harder to release that equity to move forward(Especially in the current tight credit market!!!!)
Offset accounts are great if you are savy with your budgeting and your loans are partly or fully floating rates. Fixed rate loan interest repayments are generally not able to be offset.(I may be corrected??)
Hi
There isn't really anyway of appealing it.
Only advice would be to get your own independent valuation, if this is considerably higher, send that and your other supporting evidence to the original valuer and maybe ask the bank to get another valuation done by someone else.
Although its clearly never going to be admitted the banks(LMI's) control the true values. Valuers in this market are puppets to a certain degree.Also there are really great posts on valuations in these forums. have a search and see what you can dig up.
Hi Tremelo
How was the original amount borrowed? Equity? Line of credit? Same bank for both properties?
Your broker should be able to devise a way of structuring it correctly.
No 1 rule= Avoid cross collaterisation 99% of time.
Wow
There are some really great ideas there. And some different ways to go about ways already working on.
Real estate agents are not always very lucrative however as mentioned above, finding the "right" agent is worth the time and effort. Some one who is ambitious and motivated, knows what they are talking about!
Very good strategies.
Well done to all posters!!!
Sorry-forgot to say, bookmark the link if you like,
We watched it as the rates were coming down and it was very close in the predictions…
The fixed wholesale rates are generally the cost of the banks funding and they forecast what they think the rates are going to do.
If fixed is heading up, the floating will follow. With the fixed rates all heading up, the floating will probably follow in a short time.
Which is shown in the asx chart above….. Pretty simple(tongue in cheek)This chart is updated daily i believe.
http://www.asx.com.au/data/trt/ib_expectation_curve_graph.pdfThe only way to look at fixed rates is to monitor wholesale rates.
We knew a few investors who got the 5 year fixed at it lowest point…..Its now not really that cost efficient to fix as the averages are far too high above the
floating rates. HOWEVER it is still risk management to fix if you "think" its going to go
up more substantially…..They all seem to want BAS statements so far.(which in turn pretty much makes it a full doc…..)
We need the cycle to gain a bit more momentum so the banks will ease up some.
There are one or two No-Doc loans(with fairly high lvr's) still available i think.
The results program is well recommended, i cannot personally say i have done it however know investors that have.
The newer you are the better lessons you will learn. It doesn't matter when you start it matters that you actually ACT.(which sounds like you are)I think there is actually a forum about education and many reviews on various programs ect.
Many programs are great however it depends on whether you want to go down the capital growth path, cashflow positive path, or a bit of both.
Read reviews ask questions and dont part with your money unless you are going to be committed to put in the hard yards. Just look at what Steve Mcknights hard yards have achieved!!!
Do it- Good Luck.
Yes all above is great advice,
Clients that have been in the property cycle for a while as Richard and Terry would attest to, use borrowed money to borrow
more(more investment property) ensuring it is all tax deductible.Like Richard said everyone's situation is different however interest only is usually the best option to free up cashflow and then draw on equity in due time. As with todays rise, staying on a floating rate is becoming more and more cost efficient, this is perfect for offsett accounts and interest only loans.
I just wrote an article(very basic) about interest only loans on site below(make sure to return to forum though!!)
(go to blog once on site……)
