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  • Profile photo of Mortgage HunterMortgage Hunter
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    September 14, 2003 - 10:04 am

    St George don’t have a specific product. You may apply for up to 15 years IO on their products provided the loans aren’t subject to LMI ie under an 80% lend.

    Simon Macks
    Mortgage Hunter
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    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of Mortgage HunterMortgage Hunter
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    September 14, 2003 - 6:47 am

    Where are you Jody?

    Simon Macks
    Mortgage Hunter
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    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of Mortgage HunterMortgage Hunter
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    September 14, 2003 - 5:39 am

    Snakey,

    If you have been in the same industry for three years as a contractor then you shouldn’t have too much trouble on this account.

    If you have a deposit or sufficient equity remaining and your icome is enough then it shouldn’t be too hard.

    Simon Macks
    Mortgage Hunter
    [email protected]
    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of Mortgage HunterMortgage Hunter
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    September 13, 2003 - 6:36 am

    Enjo Lady,

    I wasn’t clear enough. When I referred to finance 100% I meant finance 20% from current equity and an independent 80% lend against the IP exactly as you suggested.

    Patricia,

    This strategy involves borrowing 20% against your home or other IP if there is sufficient equity and then the remainder against the new property.

    Hope this helps.

    Simon Macks
    Mortgage Hunter
    [email protected]
    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of Mortgage HunterMortgage Hunter
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    September 13, 2003 - 1:11 am

    Gemma,

    I think this is a US strategy. I am nor aware of it happening here in Australia.

    Cheers,

    Simon Macks
    Mortgage Hunter
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    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of Mortgage HunterMortgage Hunter
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    September 12, 2003 - 10:40 pm

    I can’t see the advantage gained. Find yourself a broker who can research and negotiate on your behalf. Here in Australia most don’t charge for their time and I guess it is the same in the US.

    Cheers,

    Simon Macks
    Mortgage Hunter
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    0425 228 985

    Profile photo of Mortgage HunterMortgage Hunter
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    September 12, 2003 - 10:29 pm

    Michael,

    You really need an accountants advice. I think the issue might be that of market value and a transaction at arms length should you be audited.

    cheers,

    Simon Macks
    Mortgage Hunter
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    Profile photo of Mortgage HunterMortgage Hunter
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    September 12, 2003 - 9:11 pm

    I can’t see any advantage in taking it beforehand. I would appreciate any insights by anyone else on this.

    I would take it all at once with the same lender. It will certainly be more attractive to that lender to do the whole deal.

    cheers,

    Simon Macks
    Mortgage Hunter
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    0425 228 985

    Profile photo of Mortgage HunterMortgage Hunter
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    September 12, 2003 - 9:08 pm

    If the floor size is less than 50sqm you will also have some additional problems obtaining finance.

    Not impossible, just harder.

    Cheers,

    Simon Macks
    Mortgage Hunter
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    0425 228 985

    Profile photo of Mortgage HunterMortgage Hunter
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    September 12, 2003 - 9:04 pm

    Spot on Andrew.

    It is the purpose of the borrowing that determines deductability.

    That is whether it was used for investments returning an income (even neg). This precluds investment such as bare land which is not rented. Although the interest component can be accrued and deducted from any capital gain before CGT is applied.

    Simon Macks
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    Profile photo of Mortgage HunterMortgage Hunter
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    September 12, 2003 - 12:27 pm

    Check that your bank will accept two people on title but one on loan – some don’t.

    Another idea might be to have him place a caveat on the title. A caveat means that someone else has an interest and the property cannot be sold unless it is withdrawn by the person with the interest.

    I am sure your solicitor know best but check it fits with your bank too.

    Cheers,

    Simon Macks
    Mortgage Hunter
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    0425 228 985

    Profile photo of Mortgage HunterMortgage Hunter
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    September 12, 2003 - 12:23 pm

    Suncorp Metway and St George have lower priced LODOCs.

    But most good ones reduce to normal variable rates after two years.

    Cheers,

    Simon Macks
    Mortgage Hunter
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    0425 228 985

    Profile photo of Mortgage HunterMortgage Hunter
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    September 12, 2003 - 12:07 pm

    Well done.

    Another good idea is to split the PPOR loan to show the different amounts seperate.

    Makes your accountants life easier!

    Cheers,

    Simon Macks
    Mortgage Hunter
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    0425 228 985

    Profile photo of Mortgage HunterMortgage Hunter
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    September 12, 2003 - 11:44 am

    Sorry Kittee,

    Slipped into some broker jargon there.

    x-colled is cross collaterised which is when the properties are secured against each other. This tends to be the banks preference and is OK for an investor who just wants one or two IPs with a buy and hold approach. As an investor gets a little more sophisticated then it is better to avoid being x-colled.

    Simon Macks
    Mortgage Hunter
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    0425 228 985

    Profile photo of Mortgage HunterMortgage Hunter
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    September 12, 2003 - 11:32 am

    Gemmagirl,

    IO is best if you still have a PPOR debt. This PPOR should be paid off before you start to reduce any of your IP debt.

    Best for tax effectiveness.

    As far as best mortgage goes we don’t really know enough about you to advise. There are some great pro packages available and also some good fixed rates atm.

    All the best,

    Simon Macks
    Mortgage Hunter
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    0425 228 985

    Profile photo of Mortgage HunterMortgage Hunter
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    September 12, 2003 - 11:19 am

    Mel is spot on and will be a great asset on any investors team.

    Just to add a tiny bit. One idea could be to pull a 20% deposit from your PPOR loan if possible. Then buy an IP with an 80% lend.

    Now the properties are not x-colled and the loan is structured to avoid LMI.

    The entire 100% interest bill will be tax deductable if the property is available to rent.

    Hope this is clear.

    Simon Macks
    Mortgage Hunter
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    0425 228 985

    Profile photo of Mortgage HunterMortgage Hunter
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    September 12, 2003 - 8:00 am

    Apparently this was found to be the worlds funniest joke by an English University.

    Two hunters are out in the woods when one of them collapses. He doesn’t seem to be breathing and his eyes are glazed. The other guy takes out his phone and calls the emergency services.

    He gasps: “My friend is dead! What can I do?” The operator says: “Calm down, I can help. First, let’s make sure he’s dead.” There is a silence, then a gunshot is heard. Back on the phone, the guy says: “OK, now what?”

    Simon Macks
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    0425 228 985

    Profile photo of Mortgage HunterMortgage Hunter
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    September 12, 2003 - 7:01 am

    Crashy,

    I think you have over simplified this argument to suit your viewpoint.

    There are advantages in negative gearing and I can point you to people who make very substantial profits from buying and holding prime growth real estate with no likelihood of positive cashflow.

    You are very correct about the follies of buying with the sole aim of making a tax loss. You are wrong if you believe this is the sole aim of all negative gearers.

    I think an educated investor needs to understand the different avenues available and decide their path to wealth.

    I know that this great forum is very popular with pos cashflow fans and I hope I haven’t ruffled too many feathers [^]

    Have a great weekend Crashy!

    Simon Macks
    Mortgage Hunter
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    0425 228 985

    Profile photo of Mortgage HunterMortgage Hunter
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    September 12, 2003 - 6:35 am

    A bus carrying only ugly people crashes into an oncoming truck and everyone inside dies. They then get to meet their maker and because of the grief they have experienced, he decides to grant them one wish each before they enter Paradise. They’re all lined up and God asks the first one what the wish is. “I want to be gorgeous”, and so God snaps His fingers and it is done. The second one in line hears this and says “I want to be gorgeous too”. Another snap of His fingers and the wish is granted. This goes on for a while but when God is halfway down the line, the last guy in line starts laughing. When there are only ten people left, this guy is rolling on the floor, laughing his a*se off. Finally, God reaches this guy and asks him what his wish will be. The guy calms down and says: “Make ’em all ugly again”

    Simon Macks
    Mortgage Hunter
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    0425 228 985

    Profile photo of Mortgage HunterMortgage Hunter
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    September 12, 2003 - 4:36 am

    Perhaps he needs to consider a negative geared portfolio of growth assets.

    Negative gearing with the sole aim of making a tax loss is not a recipe for success, however, negative gearing using assets especially selected for growth potential can be very lucrative.

    This might be property, shares or a combination of both. This portfolio may also include high yield investments.

    There are other schemes involving tea tree, olive and emu farming which need very careful scrutiny[;)]

    Simon Macks
    Mortgage Hunter
    [email protected]
    0425 228 985

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