Forum Replies Created
Lo Doc’s are a good way to go, but in a lot of cases you need an ABN and for 2 yrs.
If you don’t have this, then a No Doc is the way to go, although max 65%lvr.I gather you’re IP’s aren’t wrapped?
Are they with the same lender as your PPOR?A good way to go is a line of credit from your equity to use for deposit’s on Lo doc loan’s. However, make sure your PPOR has it’s own lender, keep it seperate from the IP lenders. This protects your PPOR if anything happens to your IP’s.
Be very careful of debt consolidation companies.
What they will do is place the ppeople in a Part 9 Agreement which is a form of bankruptcy. A lot of the companies don’t inform the people of this, they just say it is not bankruptcy, but you get to pay say $100 wk with no interest.Before you wrap though, why don’t you take out some of the equity to use for deposit’s on other properties. Instead of having one wrap you could have two,three, four etc… depending on how much the property is valued at?
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cheapest ratesAlso, make sure you go with a couple of different lenders.
Do not use the same lender that has your mortgage on your PPOR for your IP.The problem you are facing is noted with a few lenders. Anz and Westpac are also noted for this comment.
Lo Doc’s is a good way to overcome this hurdle.But the problem you are facing is not the only problem you COULD be facing. This is also highly important for new investors.
In regards to what Melanie suggested;
Spread your loans around!This is why.
If someone gets a LOC on their PPOR for their deposit on an IP and go with the same lender for the mortgage on the IP, they run a risk. If someone gets a LOC on their PPOR for deposit on a IP and goes with another lender for their IP, they run very little risk. WHY?
Well if something happens, (repossesion) the bank can take both properties or your PPOR. For Example; If PPOR is valued at $400000 and has a mortgage for $200000 and the IP is valued at $100000 with $80000 owing, which one do you think the repo guys are going to take?
So to protect your properties (especially your PPOR) spread your loans around. Depending on how many you have, a good average is 2 or 3 properties with one lender. But your PPOR should always be by itself.
There are other technics also. Which my clients have embraced.
Stuart,
Are you sure with Suncorp, don’t they only lend min 60sqm?
Also, suncorp you need $250k min assest
Min 3yrs Self employment in current buisiness.St george 6.57%
Max 65%LVR
App; $750 then $10p/m
Min 2 yrs Self employedA No Doc loan may be suitable for IP’s 65% max LVR rates vary from 6.8% no ongoing, application $600.
Lo Doc
6.84% if <76%LVR
7.09% if >76%LVR
no ongoing fee
application $600
exit fees; 2mths repaymentsMx Borrowing with Liberty is $270000, this is assuming they are only a couple with no children and the $60k monthly repayments are only 3%. Still need deposit, generally 10%.
Best to get the debts down
Non-conforming lenders are lenders who look outside the square. For Example, they will lend to people with a blemished credit history(1 day out of bankruptcy), take different incomes into consideration(pensions), generally have a more flexibale servicability (they lend more)etc…
They lend when and where the banks won’t.There is one bank that will accept 5% no genuine savings.
There are a few other lenders who will accept it. You’d probably get away with it in this instance with most lenders, as most lenders have a 10% no genuine savings product.Also, St George have a 100% loan where all you need is FHOG to cover costs, but is dependant upon location.
I agree with Stuart.Out of those mentioned Liberty would be the best in regards to interst rate, exit fees, etc…
But you might want to try these as well
La Trobe Home Loans
Paramount MortgagesLa Trobe will give you the cheapest interest rate etc.. out of all mentioned.
I’m with Southern Cross Telco
no contracts
no monthly fees
no connection feeCan buy phone off them for about $300 or $30 per month
Then, you just pay for your calls
Rates are 20cents per 30 seconds anytime day or night
This is a business phone
Are you sure the 3 mortgages are from banks?
I’ve had a client wanting to refinance 3 mortgages down to one. The way it was, was
1st Mortgage to a bank
2nd Mortgage to another company, not a bank, who specialize in 2nd mortgages.
3rd Mortgage to another company, not a bank, who will lend to nearly anyone.The total of the mortgages only added up to 90%LVR, but the interest rates on the 2nd and 3rd were quite high. He was self employed and could only get the 1st mortgage at 80%LVR, the second to 85%LVR and the third to 90%Lvr.
No doubt after consolidating into one, he probably went and did it again. But what can you do.
I’d just say, these are the facts(such and such), regardless of what you believe or feel, these are the facts. Also, you should tell your family as soon as possible. If you don’t take this seriously, See Ya.
Hi All,
I’m a mortgage/finance broker, with a National company with Construction homes,Land Development and Real Estate Agencies combined.
Never boredThe Nab will lend if they have a branch in the town. Heritage is very good with difficult areas. Ther might be a couple of others that will assist, like Stuart said at 80% LVR.
This is a good debate. It is also a debate amongst solicitors as well. Some will do it, some will not. The ones against believe it is fraud, the ones for, go on the fact if the property value’s up then there is equity there, and to be used.
There are different approach’s for it to work. I will mention though, it always comes down to the vendors participation or not. You must consider, the vendor will pay costs on the contract price.
I must also mention that generally these tactics are used to purchase a property when you have no deposit or costs, and also it is mainly done between friends and family. When it is disclosed to the lender (some lenders do, some don’t)they are generally fine with it. But my main point is that under no circumstances would I approach it in the manner of adding extra cash in your pocket, as done in the posting of FREE DEPOSITS. I don’t think the lender would agree to that, if they knew. That is an example where I would tend to lean to the side of, a case of fraud.
Anyway, to the strategies;
1st
Purchase Price (which must never be higher than the listing price, that is definately illegal)
$100000You negotiate with the vendor to $90000
The $10000 difference can be used a non-refundable gift from the vendor to the buyer to assist in legal costs, small repairs and deposit.
This is disclosed to lenders. The other way is put the $10000 on contract as a paid deposit.2nd
Same senario – instead of a non-refundable gift, the vendor loans you the $10000 at whatever interest rate (but you now must take this loan into your serviceability),goes on contract. This can now be left as is, 2nd mortgage or after settlement the vendor wipes the loan.With a lot of lenders they do not care where the deposit comes from, as long as there is equity in the property for them to retreive there funds if needed.
It is disclosed to the lenders. On disclosure, How many wrap investors are disclosing that they are wrapping the mortgage to their lender. For Example, if you’ve got an ING,Suncorp,Macquarie,NAB and the list goes on, loan, you definately haven’t. There are only a couple of lenders who do accept wrap investors, I bet not everyone is with these 4-5 lenders.The technics used above are used often. But you do have to find a vendor that will play ball. Also a solicitor and of course lender.
Firstly; I consider, Liberty to be the best in the non- conforming market. They have the cheaper interst rates and fees. (A lot of lenders have recently lowered rates to compete against Liberty). Also, very smooth to settlement.
The other lenders are generally only used in certain circumstances. For-example, Ge will do difficult areas. Bluestone will go up to 40 acreas. Pepper will place some of the fees on top of the loan, therefore requiring less funds from the client. The fees aren’t all of them, but can assist with some certain clients.
Also, Terryw
The upfront commision is higher with Pepper, actually is higher with all lenders just mentioned.
All he needs is a no-doc loan like Stuart said. Max LVR is 65% Therefore max loan amount is $260000. Interest Rates vary,one of the cheapest would be 7.29% with no- ongoing fees and only 1-2 months repayment exit fees. Application fee $600
If he has calculated the risks
First sounds like a good goal everyone is trying to do.
Secondly, the banks will take your rent into account, however a lot only accept 75% of rental income, of course though there are lenders who will take 80, 90 and 100%, however most are only 75 or 80%. The NAB take 100% if rental agreement in place, but they do not do Lo Doc Loans at 80% LVR. The reason I say this is when you reach this stage, you might be better off trying the Lo Doc loans, although the interest rate is generally 1% higher then reverts back to standard variable after 2 years good payment history, you self declare your income. You will need an ABN for min 2 years, so best grab one. You can get one online at the ATO site.
Generally how it works is you can self certify your income, but your required a 20% deposit each time, then there is not much of a limit.
If you desire, i can assist you with all needs. Loans and wraps,rent to buy and a very exciting new product being released in the next week, that I’m sure everyone will like to hear about.
First off, Don’t go with Bluestone, other lenders are cheaper interest rates in the non-conforming market. Bluestone is generally the dearest and has the highest break fees.
Secondally, you’ll find it pretty hard refinancing with a conforming lender (ie Homepath)due to the late repayments with all of your current loans. They generally won’t want to know you. Generally LMI will decline the loan.
However, if you lend only up to 80% LVR, you may be able to get away with it,but don’t count on it. However there is a lender who caters for both conforming loans and non-conforming. Their interest rate is 6.6%. Your best shot really, to recieve a decent interest rate. Then, worst case,(if declined) apply through non-conforming loan.
Only up-front fee involved with this lender; is valuation on conditional approval, therefore you already know whether to proceed or not, this is when the funds are required.
Conditional approval- generally is subject to valuation to recieve Formal approval.
