Bricks and Mortar IS Property?

80% is old news. Get your head out of the 80's Duck.
Re-fi + equity release 90% LVR is no worries.

Rather than following the apparrent trand of guessing blindly in the dark, much like the advice you just recieved, why not invest in some actual facts and figures.

Look at the very useful free sites, like realestate.com.au and domain.com.au, and look at suburb profiles and recently sold properties. DO NOT put any weight in the advertised prices, as they really dont mean that much.

See the link below for the information that I was able to fing with 3 mouse clicks, in under one minute. Actual numbers, not ridiculous blind guesses.

http://www.domain.com.au/public/suburbprofile.aspx?searchTerm=newcastle&mode=research

By the look of it, the only years the suburb of Newcastle has experienced negative, or stagnant growth, was 2005-6. Other than that, it looks like it has preformed reasonable strongly and depending on the price, it might be well worth looking at.

I hope this helps. And I dont mean just helps JustAllan, but maybe it will hepl all the other individuals who are quick to offer their mis-informed opinions.

It will certainly be better to break the loan sooner rather than later, as the lions share of the break fees will be worked out on the difference between what you are fixed on, and the current market rates. That means the longer you wait, the more expensive it will get if the RBA drops rates again (highly likley).

There might be a middle ground, by breaking the fixed rate, but not leaving Rams altogether. I know you hate them, but it might be a good way to keep your monthly cash flow healthy, and not donate too much in fees.
The best way to find out is to call them, and get them to EMAIL or POST you an estimate on the fees. That way you will have written reference to it, and you can make an informed decision.

Sounds like you need to do some more research.

If you transfer the properties from the company (or trust) to each individual investor, you WILL pay stamp duty.

If you sell down some of the stock at wholesale, you will KILL the future plans to sell the units at market value, as the valuation will rely heavily on the comparable sales.

By allowing each investor to take a unit at cost price, you will open everyone up to far more CGT than is neccessary, and increase your tax obligation on the project. If anything, you should sell the units down to the investors at the upper end of market value, and keep the margins of the project as thin as possible.

Personally, I would decline to take part solely on the basis of the poor quality of your post, and the obvious lack of experience it shows.

Advice – Go get someone experienced to assist you

Speak to an account than can count to ten (or preferable more)

As EVERYONE said, invest some time and $$ in a fesability study to see where you are at.

Why do you want to go 'Owner Buiilder'?
Taking into account the earlier mishap in your calculations of 80% LVR, and also that it is your first home, it might not be the best strategy?

Also, what will the value of the property be when it is complete?

It certainly sounds like you should set it up as investment to ease your servicing pain. As long as you 'intend' to move into the property within 6 months, you wont lost your grant. Also, don't be to fussed with the grant sitting in an offset etc, as the funds will be drawn down progressively over time. The loan will be biggest right before completion.

I agree. That is the correct formula. Just remember, you will need to work it out on the actual daily balance, and allow for any balance changes throughout the month. Other than that, if your figures do not line up with the bank then hit them up.

Good luck.

Providing you have a Sell it All exit strategy, the servicibility is not even considered for a true commercial facility. Both previous replies have completely overlooked this.
If you have a suitable fesibility and site with DA, your deal will be considered with interest capitalisation in advance, and a 'Sell All' exit strategy.
Servicing is for Residential loans, or land banking or long term holding facilities.

Let me know if you would like further information. Drop me an email or call.

If you would like to email me your contact info, I will be happy to assist you with a templats, or at the very least a Fesability proposal to submit along with a finance application.

Tim

LOL. Small.

Just to clarify, GE is the simgle largest company in the world. Small would not be one of the most suitable descriptions.
Further to that, they have got themselves a questionable reputation in the marketplace, as they have operated GE creditline and personal loan services for a long time, and certain 'Interest Free' promotions have caught some borrowers out.
I have dealt with them a few times, and all seems well. I have spoken to some that would cut off a limb before going near them.
You will hear good and bad about everyone in any given market.

The comparison rate does not (and is not required to) take into account the exit costs because you are not meant to take out a long term loan with the goal of short term refinancing. Generally, the lenders that have higher exis costs are the ones that offer the lowest ongoing rates, or at the complete other end of the scale the others are the ones that have a niche in the market. Bluestone, Peppers, Rams, Sieza and to a lesser extent GE money all have their respective place in the market.
Lets not forget that these guys are running a business, and they make money from borrowers in the form of interest over time. If a lender is willing to take on a client with credit impariment (as an example), they are putting theircash on the line to give that person a second chance. If that person sorts everything outin 8 months, and then buggers off to a mainstream funder, the organisation that went out on a limb has made nothing for it. This is particularly true of funders that will accept messy refinance statements. They cover their costs by charging interest, and they make profit from the exit fees.

My opinion is forget the exit costs, because if you really sit down and work it out, shopping around for the 'best' deal is more expensive in the long run. Get a competitive and reliable funder, that gives you the ability to switch/substitute security properties, and convert to alternative loans for a minimal costs. DEF and early payout fees should be the least of your worries.