Forum Replies Created
I haven't met one that works on rate, although there are some that will do specific tasks for a set fee. Negotiations with agents and bidding on your behalf at auctions for example.
Hi Mike,
Definitely you can use who you like. I have interstate clients but also clients who work overseas and cannot physically meet any Australian broker, and technology is sufficient to do all aspects of the loan and continual contact. There's no difference here with dealing with a broker interstate or intrastate.
We tend to rely on technology for so many things these days, getting a home-loan is slowly starting to fall into that picture as well.
You just need to find the right broker who is transparent and who you can research well before making the decision to use them.
Richard has it all covered, and a good broker will also be there to answer any queries along the life of your loan and will proactively ensure that you are being looked after, whether it means restructuring when required or even changing banks for a more attractive package (and no, not always about what's cheapest!).
The number of people I meet who have had their loan for a number of years who had no idea they were being ripped off either through terrible rates or poor service as they simply "didn't know" still amazes me.
Many bank employees are there to sell a product, we are here to help you find solutions.
Then again, it will come down to the individual broker, and there are some very poor ones out there. A negative (although it's more about our system itself) would be that it's a little too easy for someone to become a mortgage broker, so you can find brokers who are only in it for themselves and with little experience or very poor knowledge…
Hi Sri,
Our offices are in North Melbourne and you are free to look at our credentials on our website to see if you'd like to meet with us. We also run seminars on first home purchasing and investing if you'd like to see how we operate first. All details are on our website.
Best of luck with your search.
Hi Dale,
Yes, lenders vary wildly based on their internal credit controls and what risk tolerances they have. The best bet is to go and speak to a broker who can go through these calculators with you and help you navigate the journey. They will also be able to help you with servicing based on any additional income you'd receive (such as family assistance etc).
But as a guide, pick out a couple of the major lenders and take the conservative approach, and then have a look at the repayments you'd be up for not just at the current rates, but at rates even 2-3% higher than what you'd be paying now, and that will also help you understand your own loan affordability and comfort into the future.
Best of luck and feel free to come to one of our home buying seminars if you want some further help – details on our website.
Completely agree, not only is NCCP a new hurdle, but it also falls under what is good conscience in assisting any client with their lending and ability to repay their loans.
That's a very interesting story regarding the CBA Lo Doc loans and something I've heard similar to the USA in the last few years. I'll have to keep in mind for my developer clients – thanks for the heads up! Do you know if there were any other factors to the call-in (such a payment arrears) or was it just based on the income check?
Pure asset lending is available however even they are starting to change to see an available income source (under responsible lending compliance).
Another, possibly safer option is to buy property for cash, and then use the rental as an income source and then that can help service further loans in the future (along with the rental you would recieve on the new properties), then when you are out of uni and have an income source, you can always take loans out against the property you bought for cashm (although the purpose of funds will determine the deductability).
Might be worth speaking with an accountant / financial advisor regarding these considering your current income though…Good luck with your search!
Hi Nina,
Depends on the property type as mentioned by swampy but purely from a capital growth perspective, a unit in Sth Yarra (as long as you have some decent land content and it isn't high-rise, so less than 20 in the block) should perform better than a house in the far outer suburbs. Generally this is due to the land and demand in the inner city being far greater than that of areas where land is in abundance. There are also issues with properties in the "mortgage belt", as these are the properties that come under affordability pressure if interest rates rise. There are some opinions though that Melton is on the rise, although I personally don't agree.
Can't comment on Zillmere, sorry…Hi Jack,
API databank is a great guide, but always use this as an indication of the areas and don't use it as gospel. Some areas can be skewed based on new developments and particular dwellings.
To use Carlton as an example, it is a fantastic area and provides some real growth opportunities (simply look at the housing growth for Carlton and you'll see it's well above the unit growth). Carlton does however have a lot of new student accommodation in it, and the median price is fairly low. This in turns drags down the suburb average and makes the growth look poorer than it actually could be.
All of the areas you have mentioned, in my opinion all (with exception of Melbourne CBD) are great locations to look at for investment potential with strong capital growth.
More importantly (and to further solidify the strength of a suburb), you can go into individual blocks (as Carlton does have some beautiful art deco and older blocks that have great growth potential) and do a comparative market analysis on individual blocks and units to see the price movements over the last 10 years. This should provide you with further evidence of the strength of the individual asset or block.
While overall suburb analysis is a great start, you'll find that drilling down into the neighbourhoods, streets, blocks and then individual units/houses will get you the real outperforming result. So to answer your questions, yes the suburbs mentioned are in high demand and some of the figures may be skewed but you can be sure that your search in these areas will find some great opportunities. You'll see in a recent API article the inner city of Melbourne was pinned as a hot spot for investors in the immediate future.
Best of luck and if you do need some help with the process, we run workshops specifically tailored to this exact process.
Chris Grey is also a good reference – he wrote the book "The Effortless Empire"…www.yourempire.com.au
Hey Doggity,
Being an apprentice is fine for certain lenders (CBA especially), as long as you are full time and can afford the loan, so income is your main hurdle here. Having two incomes plus the rental really helps with your servicing. Some issues the lender might have is that assuming you only use the cash available, you would need to go to about 90% LVR on the loans and mortgage insurers can be much stricter than the lenders. There are options for you to release equity from your IP's if the valuations can get higher valuations than what you have stated.
Are the payments from the Gov part of the adult apprentice scheme?
Hi Movida,
I'd of course love to throw my hat in the ring. We are based in Melbourne and would happily meet with you to discuss. You can find our details below or at our website.
Hi Taffygirl,
If you purchase the property as an IP and do the renovations immediately, then technically you can't claim deductions on the property unless it is tenanted or available for rent at the time. You'd also need to be careful over what would be classified as a repair and capital works if this were the case, as immediate deductions vs depreciation can change your tax position.
As well as an accountant, once you have purchased the property, speak with a good quantity surveyor regarding scrap values and depreciation if you are going to use it as an IP.
With FHOG and PPR concessions against tax deductions (that also may not be available immediately), I've found in most cases with my clients that the FHOG wins out more often.
Good luck and I applaud your blog – keep it up! Remember that even if you have a pre-approval, ensure that your lender will accept some of the securities you have been looking at (such as apartments less than 50sqm)…
Feel free to PM me if you want the QS and accountants we use in Sydney.
Hi Troy,
You can always try the vendor directly but they will no doubt point you in the direction of the agent (and even if they accept the agent will do his/her best to get a better offer). Sometimes you can get lucky and understanding the vendor's motivation to sell will help guide you here.
If you go through the agent the general procedure is to give them the offer in writing, stipulating the amount, settlement terms, any conditions (such as inspection, valuation, finance etc) and an expiration date of the offer.Bear in mind that if you make the offer within three clear business days of the auction date, you will forfeit your right to cool off on the offer.
A couple of tips in making the offer and the follow up:
* Request to deal with listing agent only
* Don't make an offer without first establishing the value of the property first
* Don't appear excited (as they will use this to get more $$$ from you)
* Don't chase them up after making the offer, let them come back to you and if they don't then your offer wasn't acceptedAlso IMO agents don't like to sell prior to an auction. In a sellers market with favourable auction clearance rates, then the exposure they get from a successful sale is fantastic. They also gain benefits from the advertising up to the auction and of course the people on the street / in the rooms at the auction. They'll also want to get as many people through the property as possible, so if you see a heap of people walking through, then chances are the vendor (also being conditioned by the agent) will prefer to go to auction. If you notice that the place doesn't have the numbers in the frist couple of weeks, then it might be a great opportunity to go for it.
Best of luck, and if you're in the Melbourne area, we provide free workshops about home buying and the negotiation process that you're welcome to attend.
Definitely worth asking for a better deal, they can only say no if you ask. One way to look at it is see what the price in a few of the surrounding areas and if you can show cheaper prices, it's worth pointing this out and they might bargain for your business.
If you are also unsure and want a lower price, you can put a "subject to valuation/finance" clause in the contract.Good luck and let us know how you went!
Everything has a scrap value, so it might be worth having a QS do a schedule for scrapping as well.
A good place to try in Melbourne is BMT, they will go over your property over the phone, ask a few questions and let you know if it is worthwhile. Following renno's, they will then be able to do the full depreciation schedule.Best of luck.
Hi Jaster,
Your current LVR against the IP is 87%, so going to 90% would allow you to release only $9,000 for the next property (plus LMI costs). If you can get a higher valuation then this will allow further equity. Perhaps going for a high val on the refi and seeing how close the valuers go to it might be the first step.
The advantage is that you are still applicable for the First Home Owners Grant (and boost if you build), as long as the IP is your only property owned and never lived in, so the amount of capital to contribute does come down.
There are also lenders out there who would provide unsecured credit cards to contribute to the deposit, but you need to be careful here as with your current personal loan, you don't want to get into debt that is at too high a rate.
Please note that this does not constitute financial advice.
Hi Stocko,
My first thought is to always consider what you can afford and whether the extra interest payments you will make are worth it considering the capital growth your IP can make (I'm an advocate of never selling property as long as you can maintain the debt and they appreciate!) over the next 5 years…
Hi Yuri,
Good to see you're using the equity in your home to further your own wealth and best of luck with the journey.
You can set up two accounts but there's really no need. In some cases (say with St George) you can set up a single line of credit (Portfolio account) and have several sub-accounts under it. Best to have these set as I/O (and capitalising if you wish), while continue to put your remaining capital into your PPOR.
