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Viewing 7 posts - 1 through 7 (of 7 total)
  • Profile photo of liahayesliahayes
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    @liahayes
    Join Date: 2007
    Post Count: 7
    October 26, 2007 - 7:14 am

    Hi there,

    Are you wanting to refinance these loans to purchase property in the near future, or are you simply looking to refinance to improve the structure of your loans so that you are set to go ahead in a year or two?

    Lia

    Profile photo of liahayesliahayes
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    @liahayes
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    Post Count: 7
    October 26, 2007 - 5:33 am

    Hi Neil!

    Firstly, I'm not going to recommend you sell your property!! :)

    I think you've done really well for yourself, if you bought your property at around the $600K mark and have had it appreciate to around the nine level.

    Whilst you would have more money to play with if you had a smaller house, you have a great big asset in your huge house – and whilst it's not tax deductible, if you borrow against your equity for the purposes of investment, that is very likely to be fully tax deductible (but check with your accountant!)

    You have quite a bit of equity in your home and there are certainly several ways that you could use that to jump into the property arena, in fact with your current committments you could still comfortably look at buying property now.

    Everyone's comfort zone with payments etc are different.  But needless to say… where there is a will, there is *usually* a way.

    Lia

    Profile photo of liahayesliahayes
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    @liahayes
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    October 24, 2007 - 12:53 am

    Hey Sarah,

    Couple of points – yes, be very wary of a broker who is telling you how much to put on a no or lodoc form. very dodge!!

    As far as servicability, there is always a way!  all lenders have tips and tricks to add to your servicability, whether its inclusions that others don't use, or higher servicability on particular products that they offer..

    There are some GREAT lodoc / nodoc products out there.  Talk to your broker, they will recommend the best way for you to go

    If servicability is an issue at the moment and you have loads of equity, you may want to think about refi-ing one of the houses only up to its limit (whatever that is for you, some people are happy to go 95%, some 85% no LMI..)  rather than trying to put them all over.

    Lia

    Profile photo of liahayesliahayes
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    @liahayes
    Join Date: 2007
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    October 24, 2007 - 12:21 am

    Hi there,

    There are several products on the market that will allow you to refinance your property up to 95%, in order that you could use that money for fees etc on your first IP.

    If your house was valued at 255K, you may have the option of refi-ing up to 95% and using that 17K towards purchase of your IP.

    Granted, as the other guys have eluded to, it's not a massive amount, but if you were looking at getting into the property market, you could always purchase a unit, or a lower priced home in a less exclusive area for your first property.  Have a look at the prices of units in areas that you are interested in, see what their rental yields are and what sort of CG they have been achieving.

    Keep in mind that you would need to be able to then pay the mortgage on your initial property at the higher amount, as well as any shortfall on the new property. Some people have less aggressive investment strategies to others and would not feel comfortable not having a cash buffer in place, some are more aggressive.  It really comes down to your comfort level! 

    If this is no problem to you, then you may be able to start investing now!

    Lia

    Profile photo of liahayesliahayes
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    October 23, 2007 - 6:53 am

    Hi Bicky,

    This is a sticky question, because there's alot of grey area here.

    In general (very general) keeping properties seperate will make it easier at tax time, easier to refinance and could save you money if things went wrong with the lender you are with.

    In some cases the lender will make you revalue all of your property each time you get a loan, as the equity is calculated on the combined value of your property if they are crossed.

    However in a pro pack, where there are no or limited fees for doing all the switches and vals required, its more of a headache than an actual cost incurred.  If you were not in a pro pack and were paying for vals…. different story.

    The grey area comes because alot of people think they have complete asset protection by keeping properties seperate, which is not the case.
      
    Most mortgages have a clause which allows the lender to claim against non-mortgaged assets if you default on your loan and don't have enough security to pay it out.  So your other properties will still be sold up if need be.

    Having separate lenders merely ensures the investment lender will sell your investment property first, then chase your home loan next!

    Lia

    Profile photo of liahayesliahayes
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    October 23, 2007 - 6:11 am

    Hi Chirag,

    Good on you for learning the ins and outs of what you're planning to achieve.  Everyone starts out somewhere, and asking lots of questions is the best way to learn!

    If you are looking to start out in property investing as a business, I would advise that you start out with a good accountant, who has experience in property investing.

    I would advise that you find an experienced broker to help you out with your plans and talk to you about structures etc before you start out.  Always better to have a plan to work towards!

    Aside from that, read books, magazines, go to seminars and ask lots of questions!

    Good luck!

    Lia

    Profile photo of liahayesliahayes
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    @liahayes
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    October 23, 2007 - 6:05 am

    Hi Jane,

    Jon has it very right by saying that you need to work backwards.

    Many new property investors start out down a path that they've not looked into, and end up unwittingly putting themselves into structures or loans that might have been great for someone buying one house, but a nightmare for someone who has a portfolio of property.

    If you are looking at this as a career (and why wouldn't you – most fun job in the world!) a great accountant, who deals with property investors is a must. They can advise you of structures and so forth, and set you up in the way that you need, right from the start.  Like anything, it's easier to get something right the first time.

    Looking for properties is the fun part!  You can often get good tips in the Australian Property Magazine and others in that vein as to where other people have had successes.

    Finance, yes make sure you are dealing with someone who is an investor themselves.  Essential in my opinion.  when I last had a broker, not only did he not understand what I wanted to achieve long term with the property, but didn't understand the best way to structure the loans to make sure that things would be looked after down the track, not just for the one loan!

    Other than that, have fun!  Like I said, following what you love to do is certainly the best job in the world!!

    Lia

Viewing 7 posts - 1 through 7 (of 7 total)