Forum Replies Created
Hi Guys,
One thing to keep in mind when looking at an AAPR calculation is that it does not take into account fees that may or may not occur during the life of the loan. An example would be two idential loans, one with fees for redraw and one fee free. Both would have the same AAPR.
Also the AAPR caluclation does not take into account the features or level of flexibility in the loan.
Its a good tool, but has some limitations.
Cheers and happy investing,
Nathan.[
]An even better story would be the applicants deciding to give him some of the 600 dollar rebate to the first broker for doing alot of the work! Or bought him a bottle of Champagne atleast. Then everyone wins!
[
][][]Cheers,
Nathan
Hi Guys,
Not sure where I am going wrong, but I get a different answer:
11 secs
rent return 160+ 170 = 330
sight fees * 2 = 200rent less sight fees /2 = 65 * 1000
=
$65000[?][?][?]
Cheers, [
]Nathan
Hi Walkernick,
The problem you are encountering is callled a third party mortgage. A few years ago this was fairly common practice, but in more recent times, institutions have moved away from them.
If you are responsible for the loan repayments institutions also want to see you have your fair share of the ownership of the property.
The crackdown arose after a court case where a bank (ANZ actually I think [?]) tried to repossess a Dad and Mum’s house that was put up as security for their son’s loan. Being a good son he purchased fast cars and lived life to the full and defaulted on the mortgage payments.(please note that this story has been embelished some what![
])The bank, as a condition of the loan (and after the parents were unable to handle the burden themselves) went in for the kill.
The final decision of the court was that the parents were not receiving any tangible benefit from the son purchasing the property. I should mention that they had no ownership and were guarantors of their sons loan. They did not own the property that secured the deliquent loan, and their only reason for the loan was through parental love.
There was a lack of ‘consideration’ in the contract for the parents.
The court held that the parents were not bound by the contract and therefore their security should not be lost as a result.
.
As a diary note for ANZ introducers there is a question that has to be answered:
DO ALL THE CUSTOMERS CLEARLY BENEFIT FROM TAKING OUT THIS LOAN?
This may be hard to justify if some of the parties are taking on equal liability and only 1% ownership.
You will find that a lot of institutions are asking for equal share in ownership for taking on repayment responsibilities. As Annaw has mentioned below though, you can still find a few who are happy to do it.
In terms of a using a trust to solve your ANZ lending problem, you may be back in the same boat. They will ask for a copy of the Trust Deed and if the Trust is setup to achieve the same result, they will say no.
walkernick, if you are looking for a potential solution to the problem (other than finding an institution that will do 3rd party mortgages) one comes to mind.
If you only need assistance with the deposit, and you borrowing capacity is fine, then you could ask your parents for a non-refundable gift for the deposit you are lacking. They may be able to use redraw or top up their own loan to do this.
The deposit would have to be at least a 10% deposit and up to a 20% deposit depending on the institution that you talk to for your loan. This is because they will clasify the money as non-genuine savings.
The result will be a house in your name solely and the mortgage in your name solely. This is assuming your parents are very generous!
Hope this is of some help,
Cheers and happy investing (and money raising!),
Nathan. [
]P.S As an after thought, if this is your first property, the suggestion I have will alow you to obtain the FHOGs if you are eligable.
Hi Nathan,
You may want to have a look at the variable options package from Heritage. It has direct salary crediting and redraw (fees involved), with a current variable interest rate of 5.9%, and an AAPR of under 6%. It is a more basic set up than the pro packs mentioned, but is very compeditive.
Sooshie’s post has some great advice.
Hope you end up with the best loan to assist you achieving your investment goals!
Cheers and happy investing,
Nathan (not a bas name you have there!)[
]Hi David,
The quick and easy answer is that on a finance application the current market value of your assets is the only relevant one.
Cheers, and happy investing
Nathan[
]Hi David,
My thoughts would be that the asset is still yours until the last payment is made on the wrapped property. So on paper the LVR calculation would be exactly the same as if it was a buy and hold property.
Obviously though, the wrappees have the rights to the benefit of the increased equity, which i am sure that they are happy about (and you cannot access the extra equity for deposit + costs on another property)
Cheers and happy investing,
Nathan.[
]Hi Essykay,
What sort of property investment strategy are you interested in, and which part of Australia? If you can drop me an email at [email protected], I may be able to throw you a few names.
Cheers and happy investing,
Nathan.[
]Hi Essykay,
A few thoughts:
Why not pay somone to do the leg work for you to find properties; or maybe a money partner/ investor with someone who is active over here.
That way you can leverage you o/s income until it is worthwhile comming back home.
Cheers and happy investing,
Nathan.[
]Hi Nathan,
It looks like a professional pack that the mortgage broker offered you. The discount on the interest rate (I am guessing .5% off the standard variable rate) isn’t too bad, but is not the most compeditive on the market. To advise you further can you tell us the total loan size involved?
This will determine what packages you qualify for (and how big the rate discount is).Also, do you know if the mortgage broker told you that you qualified for the proposed loan through many different institutions, or were you at the upper end of your borrowing capabilities?Sometimes this will also determine loan selection.
Last, but not least do you think that you will be over the 90% LVR mark or under it with the new proposed loan structure in place?
Cheers, and happy investing
Nathan[
][]Hi,
Checkout the wraps and vendor finance links on the home page of this sight. Then do a search on the forum for both of these terms. There is a wealth of knowlege available.
There is also a vendor finance association website which may be of help http://www.financewrapsasn.au.
Last but definetely not least check out Sooshie’s post ‘useful links’. Should be more that enough info there!
Cheers, [
]Nathan.
Hi gazza,
Most people on this forum are looking for ways to become financially independent through positive cashflow properties. ie after the expenses are paid on your investment property the property is putting money back into your pocket.
I appreciate the research that has been done in selecting this investment, but with negative geared properties you are betting on the capital appreciation of the property to increase your wealth. This is more uncertain if you are buying a property ‘off the plan’. How long do you have to wait until the project is complete? What will the property market be like then?
Does your financial adviser have clouded judgement since he is receiving a commission for arranging this property for you?
Are you placing too much emphasis on the tax benefits of the investment purchase rather than the merit of the investment itself?
The investment that your financial adviser has found for you may be a good one. I would rather assess a property as it stands look at the surrounding factors and know (with a high amount of confidence) that it will be putting money in my back pocket and helping me retire sooner!
Cheers and happy investing,
Nathan.[
][]Hi Arnaldo,
I always like to inspect properties myself. Not only to see the property itself, but also the location, neighbourhood, and get a feel for the area. I also like to have a chat to the neighbours if possible, and the existing tennant. It is amazing what they will tell you sometimes!
But if I had found a property that met my investment criteria, and I knew the area, I would probably be happy to rely on the pest and building inspector. It would also help if I knew, and had used the pest an building inspector before and was confident in their quality of work.
Cheers, and happy investing
Nathan.[
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