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Yes you can borrow against a property in Aus to get a deposit to buy in NZ… However the loan on the property you buy should be in NZ dollars and be done through an Aus company who can lend in NZ or by a NZ company. This way you don’t get hurt by currency movements.
Good luck!
Otto Dargan
Home Loan Manager
Mortgage House Five Dock
0297128988
[email protected]Hi Adam,
The 5% rule is great, but if you want to break it down further here is how it usually looks…
Loan application (inc valuation): 600
Legal Disbursements: 150
Registration of mortgage fee: 124 (Gov charge)
Settlement fee: 100
Borrowers solicitor: up to 1500
Mortgage Stamp Duty: $5 + ($4 for every $1000) borrowed over $16,000)
Stamp Duty: See http://www.osr.nsw.gov.au for details… varies between states and goes up with the purchase price
Lenders Mortgage Insurance (LMI): usually paid if amount borrowed is over 80% of the purchase price… This is usually up to 2% of the amount borrowed
Insurance: Not sure how much, but it is required to settle the purchase.
Furniture: Not sure, a couple of thousand up to 20,000 of so, depending on taste
Otto Dargan
Home Loan Manager
Mortgage House Five Dock
0297128988
[email protected]Hi Banner,
I saw some properties out at Wagga Wagga that had a 13% return which is cashflow +, although not very. This was a block of 4 units for $140,000. This is offset by growth of around 2 -3%pa. A few towns had good rentals, Junee I heard was pretty good (they just build a jail there which has increased demand??? or so I heard).
Don’t just look on the net, call the agents and ask them what they have with high rentals. But be careful because the water rates get a bit pricey out West, don’t forget to factor this in. The houses in the $80,000 or so range often return well, but the real bargins seem to be the renovators dreams that need a bit of paint and decorating to get the best returns.
Otto Dargan
Home Loan Manager
Mortgage House Five Dock
0297128988
[email protected]Hmmmm. Its rare that a customer (even with 5+ IP) actually knows how the loan is being submitted. Often I have refinanced a loan that was submitted by a different lender that the customer thought was a car loan secured by their car but was infact “Misc investment purposes” secured by their house so that the bank would accept it.
With this in mind he is probably using Low doc loans. If he signs a declaration stating his income then its definately a Low doc. This is where instead of providing tax returns to show servicability he just signs a declaration. This type of loan is designed for people who are self employed and so avoid as much tax as possible, so their tax returns are not an accurate measure of their income. If he is using these Low doc loans then he can pretty much service any loan on paper as he can claim his income to be whatever he wants.
With low doc loans you need to have more equity 20% is the norm, but it can be 10% or 30%. Also you pay a higher rate or something along those lines. Remember the lender is taking a huge risk so its not unfair to get a higher interest rate.So maybe this is the case with your friend? By law a lender cannot give a loan to someone who cannot afford it (Kinda makes sense doesn’t it?). If they cannot show that your friend can afford it then they cannot give him a loan.
Please tell me if this isn’t what hes doing.
Otto Dargan
Home Loan Manager
Mortgage House Five Dock
0297128988
[email protected]Good question, but are you sure it would be better in your name? Obviously I don’t know the enire situation but usually its best to put it in the highest income earners name as a positively geared property often still looks negative to the taxman.
But yes you can buy a property in your name if your credit check is clean. You would need to get a low document loan as if the lender sees your tax returns they will decide that you cannot support the debt (they will not take your husband into account). Often it is better to refinance a house already owned to get some of the money and to then get the rest by borrowing against the IP you are buying.To approach a lender about your situation just tell them your situation and make an appointment and they can work out both a structure and a loan type to suit you. It seems like the family trust idea is a good one, however most lenders wont know much about it, talk to an accountant.
From personal exp most lenders would rather not deal with family trusts! Recently I helped someone with a loan and the paperwork blew out to 129 pages!!! Boy did I clog some fax machines! Several forests died in tha making of that loan.
Otto Dargan
Home Loan Manager
Mortgage House Five Dock
0297128988I’m sticking to my guns!
There are good companies out there! I completely agree that most are shonks. I don’t think anyone can disagree with that!
Its hard to find good ones. Usually the bad ones have an extencive network where everyone is in on the scam. All you need to do is get an independant valuation and all is revealed! The people in this industry that are trustworthy don’t give free trips to queensland. I know of some good ones where the independant valuation comes back $30,000 above the sale price. Remember I work as a Home Loan manager so I have to do a valuation on everything my customers buy.
These companies are great for people who don’t know much about property and don’t want to know much on the condition that they get an independant valuation! Its a pity that since the people who use them aren’t experts they usually don’t get an independant valuation, which mwans they can get burnt.
All the good comapnies I have seen do not advertise, they work by personal referral. They don’t give referral fees either, their margins are too low. I have great respect for these companies as their ethics are well above that of the rest of the market. If a product or service isn’t good it will only rarely work with personal referral. This website is a good example in that I have told many of my customers and friends about it and they in turn have told theirs. If it wasn’t good then I wouldn’t have told anyone about it.
Otto Dargan
Home Loan Manager
Mortgage House Five Dockquote:
Thanks for the reply, Dave.
Any idea of a 3rd party company who can does a
quality DD on potential wrapee, short of going for
a realestate agent ?Thanks
MCWWhy not do it yourself? Look at the application forms for various lenders, they have all the questions that you should be asking the person. The more declarations the better!
Are you known by any other name? YES/NO
Have you applied for finance with another institution? YES/NOA privicy statement is a MUST before getting a credit check (if you get it. If they get it then its ok).
Also get a financial statement of what they own and how much they owe. If they are 60 years old and have $2000 in assets then maybe they can’t handle money well? ask them questions relating to the data they give you. By the looks of things you have the right idea! The things you listed in your post are all spot on.
If you want I can fax you a copy of the application forms I give to customers (I work for Mortgage House) and you can get some ideas of what we like to see. Give me a call if you want a copy, my number is written below.
Otto Dargan
Mortgage House Five Dock
02 97128988Hi Everyone,
Valuers are faced by this problem aren’t they? I did a Real Estate course with Tafe a while back and they had access to a Land Title office database which could spit out ALL the sales for the last 12 months for a suburb or for a “2km radius” from the property selected. I think there is a cost to subscribe to this database. Most valuers should be subscribed. While doing the course I did a search for my house in Russell Lea (Five Dock, Sydney) and it gave all the sales data for Five Dock and its surrounding suburbs (several pages, 10 or so I think). Since this was a while ago can someone (possibly a valuer??) confirm this?
Otto Dargan
Home Loan Manager
Mortgage House Five Dock
02 97128988Hey Everyone.
I also work for a major lender and I have seen some good and some bad investment companies. The best way to protect yourself is to get an independant valuation. This costs $200 – $300 and will be written to you with your name on it. This means if you then buy it and find out you got ripped off for $20,000 you can sue the valuer. The property company will probably show you a valuation they have got, which is written to them. You don’t have the right to sue their valuer if the property isn’t worth as muh as they say it is. Some of the companies have valuers getting paid extra to give them high valuations so they can claim they are discounted.
However I have found some real gems as far as Investment property companies go. Don’t just dismiss the entire industry as a scam.Happy investing!
Otto Dargan
