Forum Replies Created
Be surprised how many Brokers / Bankers have no idea how to structure an investment loan and end up costing an investor $$$$.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Allister
Every property i own is in Brisbane or SE Qld so i guess i am slightly biased.
In my opinion many parts of Brisbane didn't really fall as much as others post 2007 and certainly we are starting to see the right property become sought after with investors / owner occupiers.
Valuations are certainly stacking up and in fact a couple of deals i did this week the valuer actually commented that the property was good value.
In saying all of this whilst i think we will see a further pick up in Brisbane prices over the next couple of years can i ask you why you are looking to sell.
You mention that you might look to rent the property out so i am assuming it is currently being used as your PPOR.
As long as you aren't looking to buy another PPOR and the current loan is currently structured incorrectly i can't see why you wouldn't rent the property out and look to build your portfolio.
Remember there maybe both non cash deductions i.e Depreciation & Capital Allowance as well as cash deductions such as interest, rates and insurance etc that you claim.
If the property is not held in your sole name and you are the higher marginal tax payer a spousal transfer maybe with thinking to maximise your deductions even further.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
That's what the forum is all about sharing information with other interested property investors.
Hope you stay around to enjoy all the forum has to offer.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Also forgot to say not all lenders insure their loans and the odd one will waive their LMI premium to 85% lvr.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi prospector
As has been mentioned the LMI cannot carried forward to Anz however had you structured it properly you would have probably saved yourself a considerably amount in premiums.
Of course it was not in Anz Banks interest to have advised you of this as they get the best of all worlds, refinance, cross collateralised securities, LMI on both loans and then a commission from PMI for the premium charged.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
You will probably have to roll it over to a 401K complying fund in the US or similar IRA approved fund.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Sorry prospector but that is not the case.
LMI premiums are based on both the total loan amount and the lvr.
It can be cheaper to take out 2 standalone loans at 87% lvr than it can be taking out 1 with a higher loan amount across 2 properties.
Sorry your Banker or Broker didn't explain this to you.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi prospertor
Sounds to me like you have cross collateralised your two loans to get to this figure.
Not sure i would have done that.
A simplier and cheaper strategy would have been to have sent them up as separate standalone loans in order to reduce the LMI as well as the potential issues down the track.
Now that you have gone that route this is too late so i would probably pay the LMI and claim as a borrowing cost deductible over the next 5 years or the term of the loan.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Tom
If the premium was charged on the top up loan secured against the PPOR which was used for investment because the loan was now over an 80% lend then the entire premium would be deductible as a borrowing cost.
Assume Cham owned a pogo stick which the Bank agreed to take as security for an investment loan and because of lender policies they charged $1000 application for pogo stick loans then as the purpose of the funds was for investment the $1000 would be fully deductible.
Had the loan been made on Cham's new unencumbered PPOR no application fee would have been charged.
And when you find that magic pogo stick lender let me know.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Always happy to meet up with fellow forum members and have a general chat about property investing.
I am not at this stage going to Steve's seminar as i am off to the UK on buying trip for clients but go anywhere for a decent coffee.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Cham
I am not necessarily saying you will save $$ by using your IP over your PPOR however most investors do not want their PPOR being at risk for their investment properties.
As LMI premiums are calculated on both a dollar amount as well as lvr you may find out that using your PPOR might end up costing you more.
As i say it comes down your risk tolerance level and your long term objectives for investing.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks munmum glad you enjoy the forum.
Must admit late at night find typing on an Ipad i make many a spelling or punctuation mistake.
Maybe we should get Steve to put a spell check function on the wish list to help regular like myself.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Steve
Firstly welcome to the forum and i hope you enjoy your time with us.
Wont explore the question of whether the deal can be financed as we don't have enough data and that is the subject of another post.
Couple of comments in regards to your questions:
1) Whether you purchase an IP or a PPOR taking an interest only loan with a 100% offset gives you choice and flexibility. Nothing to stop you purchasing it as a PPOR obtaining any concessions / Grants that are available and then renting the property out once you have met the relevant conditions.
2) Assuming your Tax Returns show the loan can be serviced then no reason why you can't go to 400-500K purchase price. I don't now the suburbs well enough to comment as to whether you will find a suitable property for that price.
3) Don't see an issue in transferring your funds from one account to your PPOR offset account. When Peter Costello was Treasurer he actually suggested small businesses could utilise their GST and Tax money for working capital and cash flow until it was due.
As long as you don't contaminate the loan interest i don't see an issue.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Cham
First welcome to the forum and i hope you enjoy time with us.
Depending on the numbers and who the current lender is the figure will vary but my personal recommendation to clients is usually to minimize the amount secured against their PPOR and maximize the borrowing secured against the investment property.
Premium rates will vary between lenders and mortgage insurers however if the premium is charged because the borrowing is for investment then the amount is considered a borrowing cost and becomes Tax deductible over 5 years or the term of the loan.
Your Broker should be able to give you some ideas and options.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
As long as the purpose of the loan is for investment irrespective of the security it is deductible.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Shame Joe he should have waited a few months could have got the same block at $90K.
Look sorry to be negative but usual caveat if it sounds too good to be true it probably is.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Also the state of the general market.
When they are twiddling their thumbs they are probably quite happy to talk about anything to a vendor.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks guys for the defence.
Very much the case of the fat finger. Duly corrected and I will try not to make the same missstttake again.
Maybe Virtual has some vast experience to share with everyone else …… on the other hand.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Mjm
I am looking at doing a series of investor information nights in early 2013 (yes i know i said that earlier this year but the volume of business from investors meant i needed to stay in Brissie and process loans) in both Sydney and Melbourne which you are welcome to attend.
Promise i have nothing too sell other than to assist and educate other investors.
If you interested shoot me an email and i will put you on the invitation list.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
As Shahin has mentioned there are a couple of lenders that allow 90% lvr without genuine savings and a couple more that will go to 95% (albeit the LMI and interest rate are a bit higher).
No need to be paying anything more for a 90% lvr even on vacant land.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
