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The money you put down is called a holding deposit and is not unusual to put this down. It shows good faith that you are serious about the purchase and the agent should not sell the property to someone else without your consent (although they legally can). If the 10 days expires, which it will, before you get formal approval. You may ask for an extension on your cooling off. This is generally accepted, as finance is often not formally approved.
You will find that all lenders have a strange valuations from time to time. I had one knocked back from STG (not good enough for mortgage purposes) due to the fact their was rust on the under-side bearers ($5000 to repair). Stick with ANZ, but get your broker to process this with another lender at the same time. I often put loans in with two lenders when faced with a situation such as this (time is of the essence).
Hi Fraser,
I live and work in Castle Hill, and retired at thirty three off the back of property (I did this off a teachers wage). I am not an accountant, although I do my own accounting (When I retired I gained qualifications in Financial Planning and Mortgage Broking). I now juggle my time between family, this new business and looking after my property. I am quite happy to give you my perspective on making $$$.
I am still voting for sydney???
You are correct, there are so many different ideas and strategies. When I first started out, I sat with many Brokers, Advisers and Accountants. Some were rubbish and others had an interesting twist on how to create wealth. One thing I did learn was that many people have something to offer. What you are doing on the site is the first step to making the correct choices.
Tip: Don't believe everything you read or hear. i.e. Do you really think a bank will just allow you to continually borrow money- It only takes one phone call to see if this can be achieved…… When you read a book or sit in with an adviser, ask yourself, what are they selling or aiming to achieve- is it legacy or a sales pitch?
It is good news for readers of the "Money" magazine…. CBA enjoys the bragging rights and offers the magazine for free. I picked up a copy at the Castle Hill branch on the weekend.
I use NRMA for all my insurance- they have been fair to me…..
One thing I would do immediately…
Save your petrol…… Why go all the way to Melbourne when you can take a left to Sydney?
Wow! Be careful on what you take as factual…..
Not only is this not allowed fom the ATO's perspective, but there is further consequences that must be considered (CGT and land tax).
Only pay the minimum i/o payment, you can place the extra money you are paying into an offset account, this effectively does the same thing (with the added adv. of increased tax deductions down the track). If the unit was a good buy when you purchased it on day 1, if nothing has changed, then keep the property long term (this is where you make $$$- ask your parents about this one).
No, the rent does not necessarily need to cover the repayments. Although if you keep the property long enough this should also change….
Sorry, I have not heard of this group. It does not cost you anything to go in and listen (or it should not), talk to several property/ investment specialists (there are many opinions, philosophies and ideas behind investing) and you will soon get a good idea of who is hot and who is not……
Refinance to get the 20% deposit and enough for stamp duty etc (hence avoid LMI), and borrow the other 80% aginst the new security, when you set this up correctly about 110% is tax deductible. Then put your excess cash back in an offset account so your repayments are reduced. You will have the best of both worlds. Sit down with someone who can show you a few other tricks… all the best.
Don't use a LOC in your situation…..
I might take up taxi driving, while delivering pizza's and sell mortgages out of the boot……
I concur with Richard, I have had two very big months.
Q1. Everyone is treading on eggshells, you have to look at the personal details of each borrower and put the deal not with the best interest rate but the most appropriate lender. There is no one bank, just different policies that the perspective borrower must meet. You have indirectly pointed out one critical element in this question, and that is, the use of a good broker is paramount to securing a loan. This makes it very difficult for you, as your advice (particularly as you are selling the property) would not be seen as impartial.
Q2. The perspective buyer should set up split loans to show each properties debt, and I would suggest an independant valuation of the two properties to ensure an accurate assessment for this loan split, and for future CGT. i.e. the O/O part is CGT free and the investment half of this deal will require CGT. It would be similar to renting out a room in your PPOR (it has to be apportioned).
Here's another thought, change the Dual Occ. to two separate titles, this will increase the sale price and open yourself up to a new market.
As long as it works both ways?
It is the old story of "the path not taken", Your mate will never know the opportunities he has missed by not continuing with you. I would put that one down to your mate's loss.
http://www.birchcorp.com.auNo to getting a better rate- the banks would not do themself out of business. But Yes to setting you up correctly.
At the expense of competing against myself. The branch will provide a smoother experience. I call a spade a spade, Sorry to offend brokers.
On the flipside, you will be talking to a person who is not equipped with the many, many available options for investors and home owners. At a branch, you will often be talking to non-investors who will set you up with a term deposit, all while you have a home loan with an offset facility (I see a lot of this).
Solution: Ask advisers on this site what to do, and than go to the bank……..just saying……
There are a lot of variables(personal details) that must be considered, I suggest you visit your local bank or like. From an investors point of view you are in a very good position. If you can get some TLC from a reputable person you would be doing yourself no harm. Further, speak to 3/4 banks, and talk to a broker to get an overall perspective.
If you look at this site alone, you will see how many advisers or brokers have varying opinions, of which, many are correct. Your job is to select what view suits your personality.
I am also not keen on trying to predict where you will live, I have purchased two properties in my life trying to predict where I wished to live at a later date. Needless to say, both were a flop. Yes I made money, but No, I did not live there. i.e. How many children will you have, what promotions will you get from work etc.
No, you will not have to pay the mortgage insurance. The 20% deposit will be taken from your equity available from your current Owner Occupied home.
And Yes, it is important to borrow the complete $600k + so if you ever need your $260k for a holiday/ car/ renovations on your house etc This means the investment property will still be completely tax deductible. i.e. your $260k will go into an offset account. So, as you were saying, indirectly but not correctly you will not need these extra funds.
In most cases, I am not an advocate of the LOC. It would be much cleaner, and save on costs, to use split loans over one security with an offset facility attached. There are good reasons to use a LOC, i.e. a portfolio product that may be used to capitalise interest and re-distribute credit limits if you have numerous Investment properties. But this does not seem to be your case. Too often, people use a LOC without a specific need increasing their costs to investing. Without knowing all your personal details, that is a NO to LOC from me.
