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  • Profile photo of JohnSmithJohnSmith
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    October 20, 2006 - 4:32 am
    Originally posted by Mortgage Hunter:

    The single piece of advice I can give you is to leave your wallet at home and not make any decisions on the night regardless of the hype and promises they might offer.
    This goes for any seminar.

    so true – great advice.

    Originally posted by lsn:

    Just be aware there are different regulations for broking in WA than the rest of the country. They will need to have a WA Brokers licence to write your loans. Occasionally i get the odd referral from clients in Perth, but i refer them on to a WA firm for this very reason.

    my understanding was, that that had all changed, as it was impossible for them to regulate.
    but of course shhhhhhh – yes very true [evil4]

    Regards
    John

    Inspired Finance
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    http://www.inspiredfinance.com.au

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    October 19, 2006 - 10:32 pm

    Correct

    They are similar to a few of the groups getting around, that are associated with property educating arms. For example I was associated with a property group, and now another one.

    The difference is they should be know about property investing, asset protection, knowledge of the finance process behind the scenes, but more importantly how to structure your finance, and present applications in the best light.

    Come back to us and tell us how it went.

    Regards
    John

    Inspired Finance
    (02) 9944 7776

    [email protected]
    http://www.inspiredfinance.com.au

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    October 19, 2006 - 10:23 pm

    We dont have those type of vehicles, but achieve the same in other ways.

    1) By using a hybrid trust, so that interest is attributed back to the highest income earner.

    2) There is a special property trust that claims you can pass back the interest costs as well.

    Stamp Duty – the rates differ for each state. There are many calculators around
    http://www.homeonline.com.au/calculators/stamp-duty-calculator/

    The purpose – a tax by our state governments, which is used for cough roads cough hospitals cough etc.

    Regards
    John

    Inspired Finance
    (02) 9944 7776

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    http://www.inspiredfinance.com.au

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    October 19, 2006 - 2:17 am

    Hi Mark P.

    I am in Parramatta next Thursday on the 26/10, or could come and see you on another day.

    I am on the Northern Beaches of Syd, so If you prefer someone closer to you, I have PM’d some details to you.

    Also another person from these forums is in Paramatta
    Terryw from – Discover Home Loans, Parramatta
    [email protected]

    From another one of my posts – Some clients would prefer to meet with their broker some do not care. Therefore whether your broker needs to be in Paramatta is up to you.

    If you do find one ask the following –

    Is he a member of MIAA or FBAA
    How long has he been in the industry
    How will he be paid
    Is he acting as a broker or selling his own product
    Does he invest himself. (Depending on if this is your intention)

    A Broker should be part of the team you are building around you, which includes a good accountant, solicitor, etc.

    Regards
    John

    Inspired Finance
    (02) 9944 7776

    [email protected]
    http://www.inspiredfinance.com.au

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    October 18, 2006 - 10:33 pm

    Correct

    Of course, you will have to be able to service that extra amount to get it, and also apply for it. If the loan/limit amount is currently 150K then you can’t go past that till you apply.

    In the end my loan will be 180K and my property will be 200K + the renovations.

    Well hopefully – and if you have done a better job it may be worth more. Of course if you want to then access that extra cash you would have to apply for an increased loan again, estimating the new value. If you do that to soon, quite often the valuer will ask how much you spent on renovations and just add that amount to the valuation….no offence to valuers, but many are currently getting sued, so they tend to be conservative, but still within market values. I always tell my clients that they should look at the real cost, and that can sometimes be double the cash they paid out :)

    Regards
    John

    Inspired Finance
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    October 18, 2006 - 10:19 pm
    Originally posted by ptn:

    If you bought a IP in a company with a director and 2 additional share holder. What happen to the IP if you add an additional share holder or you liquate a share holder? do you have to pay stamp duty?

    No. The company is the owner of the property, and shareholders are owners of the shares. Shares can be sold, bought or issued

    Note: you can not just liquidate/cancel a shareholder. He has to sell. In some circumstances you can buy back the shares, but it must be offered to all shareholders, and he does no have to accept. Anyway – all of this is a different story, and there are many branches.

    Michael is correct – it is now more common that the company is used as a trustee. Using a trust gives more protection and a lot of flexibility.

    Regards
    John

    Inspired Finance
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    October 18, 2006 - 5:57 am

    Correct

    There is no need to withdraw the 50k beforehand, unless you need it right now, but be careful. It is best to have a second account for accounting and taxation puposes.

    If you are refinancing you would set up the new loan with –
    one split of 100K for existing mortage.
    second split of 220k for investment purposes.

    You MAY be able to ask the bank, who you are with, to set up a second LOC for 220K, and reduce the first account down to 100K

    Regards
    John

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    October 18, 2006 - 5:31 am

    LOC (line of credit) acts just like any other loan in regards to how much you can get, although most will only allow 90%

    so on your 200K equity it would be 180K LOC.

    OF course that depends on serviceability.

    Eden

    See if this helps

    a LOC (Line of credit) is like an overdraft but secured against your property, and is normally a transactional account. You can delve in and take out further cash or make payments in like salary. Can be dangerous, as it is like a huge credit card.

    Capitalising interest, just means to let it be added back on to your loan, and not pay it.

    In regards to what Terry is talking about –
    The LOC has to be associated with an IP where there is unused credit left. Some banks will allow you to not put in any cash to the LOC, and each month when interest is debited, the loan amount will increase. You can also fool the bank by putting money in and then taking it out, if they do no0t allow it. The point is you can take the debt up to your limit.

    What Terry is suggesting is all cash money is put into an offset for your PPOR and you allow your investment loan (with the LOC) to increase, allowing further deductions.

    Word of caution – the ATO clamped down on an investor that used rent to pay off his PPOR and let his IP loan amount increase, so more deductions could be claimed. All rent should be paid towards your IP’s first.

    Therefore we are only talking about other available cash.


    Dom (Salacious) – I doubt very much you have reached your borrowing limit.

    I have Pm’d you.

    Regards
    John

    Inspired Finance
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    October 18, 2006 - 4:58 am

    It will depend on the investors strategy, cashflow, capital growth, etc.

    It sounds like you need to look at what your strategy is first. Then talk to a mortgage broker, give them details of your financial situation and tell them what you want to do. They can quickly determine if it is possible.

    Regards
    John

    Inspired Finance
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    October 18, 2006 - 4:55 am

    The only one I can think of is

    Only the director/s of the company have to go on the loan application. Shareholders do not. If you had a couple of full docs and a couple of Low docs, and the full docs could service the loan, you can get better rates and lvr if the full docs are the directors.

    Companies may also pay less tax, but this depends on everyones circumstances, and what is your overall investment strategy for using the company.

    Regards
    John

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    October 13, 2006 - 9:29 am

    Just note that many of the non-banks do not have the ability to change the LVR – there are options other than the banks

    Servicing calculators do factor in a higher interest rate, but if you do move outside their risk profile……

    If you want to deal with banks you can spread it around between them. Although they can see your position, their risk is lower.

    I have seen 14 days and 30 days, but 3-5 seems a bit harsh. You can stall them while you refinance.

    Regards
    John

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    October 13, 2006 - 9:06 am

    many finance companies do not like them. Can’t remember why. MAke sure you have appropriate clauses in case you can’t get finance.

    Regards
    John

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    October 13, 2006 - 6:30 am

    That is fantastic news

    Too often properties bought from other real…cough did not value up.

    Must be a really poor market out there unless you buy from LJ…cough. They just seemed to have the right priced properties, and all those others were overpriced.

    Well hopefully other valuers on other panels will have an arrangement with HTW.

    Thanks Skippygirl

    Regards
    John

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    October 12, 2006 - 10:01 pm

    LMI will differ between each mortgage insurer and also differ for each lender. But overall the differences are small.

    Without knowing exactly what you are buying, I would guess that the “differences” we are only talking about a one to a few thousand dollars. Smaller valued properties would even be less than that.

    You mention Self Employed and Low Doc, but if you can verify your income, then you can access full doc rates.

    Also without knowing if you are a first home owner -assuming not, then you assume costs of 5% for any purchase. Therefore if you have a 10% deposit and 5% is used up for costs, you only have a 5% deposit.

    You would need to borrow 95% of the purchase price. You can do that is you are Full doc or Low Doc, but the low doc rates are a alot higher.

    Regards
    John

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    October 12, 2006 - 9:46 pm

    What Grossrealisation said is a good way to do it.

    Keep in mind –

    * Finance will be on the land and construction – you will need extra for demolition/removal if there is an existing property. (You may be able to sell the house)
    * Worth getting a valuation at beginning (to correctly price the property (no misunderstandings even if you add some premium)

    Regards
    John

    Inspired Finance
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    http://www.inspiredfinance.com.au

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    October 12, 2006 - 2:45 am

    Although I am not talking about litigation, I would say that many wealthier people use trusts to protect their assets, and it does work, as long as you abide by a few rules.

    If NAB holds your title over your PPOR, then it is at risk.

    Regards
    John

    Inspired Finance
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    October 12, 2006 - 2:26 am

    Don’t focus on whether its one or two.

    Your focus should be on the right property. If you buy correctly then that will boost you into more.

    Start doing your due dilligence on where you want to buy. If you find a couple of places where the deposit you have allows you to buy both, then fantastic.

    Regards
    John

    Inspired Finance
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    http://www.inspiredfinance.com.au

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    October 11, 2006 - 4:50 am
    Originally posted by foundation:

    I absolutely dispute this assertion.

    Let’s see:

    • Our wealth is dependant on our housing market.
    • The housing market is dependent on debt levels rising faster than income.

    Therefor our wealth is dependant on debt rising faster than income…[blink]

    Lol too pessimistic for me, and also too one sided. You discount super, you discount poulation growth, and immigration.

    Yes our trade deficit is not good, yes we have too much debt, but is it all going to fall in a heap – maybe but we are not close yet, and there is still money to be made till then.

    :)

    Regards
    John

    Inspired Finance
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    October 11, 2006 - 4:38 am

    Misconception – If you buy an investment property it does not stop you from applying and getting a First Home Owners Grant, as long as you never lived in the property.

    Storage Boxs/Carparks – good cashflow, because they are harder to sell, and also harder to finance.
    Take student accomodation – it is very difficult to finance, therefore harder to sell, therefore it sells below its real value, meaning fantastic cashflow.

    LVR will be low, and tie up you equity, when you could get greater leverage somewhere else.

    Regards
    John

    Inspired Finance
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    http://www.inspiredfinance.com.au

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    October 11, 2006 - 4:31 am

    Some clients would prefer to meet with their broker some do not care. Therefore whether your broker needs to be in Adelaide is up to you.

    If you do find one ask the following –

    Is he a member of MIAA or FBAA
    How long has he been in the industry
    How will he be paid
    Is he acting as a broker or selling his own product
    Does he invest himself.

    Well a good broker can look at exactly what you want, how it may impact you in the future, and base his recommendations on that. He will also guide you through the process, and hopefully present your application in the right light.

    By not using a broker you miss out on any knowledge he has, and any products that may be better.

    They should be paid by the Lender so essentially it is a free service to you.

    A Broker should be part of the team you are building around you, which includes a good accountant, solicitor, etc.

    Regards
    John

    Inspired Finance
    (02) 9944 7776

    [email protected]
    http://www.inspiredfinance.com.au

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