Forum Replies Created
Nothing surprises me these days especially coming out of a Bankers mouth.
Tell him loan deductibility is dependent on the purpose of the loan and not the security.
Secure your investment property loan against a pogo stick and the interest repayments will be deductible.
Subject to how the property is held there might be a way around it.
Course need to balance out the cost of doing so with the end benefit.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Dibektemir
If you want to shoot me an email i can send you a PDF article i wrote for the API magazine on the reasons why you should not cross collateralise your property.
Ways of achieving the same result without having to cross collateralise.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
GV i am assuming you are either based in the US or are an Australian resident with a US property.
If correct you are going to need too talk to an Accountant who has experience or who is licensed to operate in the USA.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Being a finance related default i think it will be hard to find any traditional lender to approve a loan with a paid default of that size.
Going to be a matter of going with a non traditional lender too start with and then maybe refinancing at a later stage.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Nick depending on the location work on something between 50-70% lvr.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Gus,
Remember when you buy an IP there are a number of variables in regards to potential rental income, percentage of rent considered, name you buy it in for deductible interest etc etc.
Regretfully each decision has a bearing on the amount you can borrow let alone the other variables.
Not the same as a PPOR purchase.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Gus
Quick summary for you:
Income – Add together the net annual income of both of you after deduction of income tax, medicare etc.
Add in say 80% of the anticipated gross rental income for the new investment property.
Expenses – Work out the principal & interest repayment of your existing 500K and the new investment loan at a rate of say 7.25% on an annualised basis.
Deduct – $3200 x 12 as an Annualised living expense.
If you have a cash surplus then likely to be good to go.
If not then reduce the numbers accordingly.Course assumed no credit card, personal loan etc.
Not perfect but a good guide.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Woodlin
Welcome to the forum and I hope you enjoy your time with us.
Firstly there is a big difference between equity and accessible equity so for the purposes of this response we will assume the figure of 150K is accessible equity.
Regretfully in the main you will only be able to set up a Line of credit or equity loan with the same lender who has your first mortgage.
Secondly by drawing down on the equity and placing the funds in your personal offset account you will contaminate the interest deductibility and therefore even if you eventually use the funds to fund future deposits will find you are unable to claim it as a Tax deduction.
As far as establishing a Discretionary Family Trust this may help you distribute some income to beneficiaries in a lower Tax bracket but remember the property acquisition has to make money in the first place. A lot of properties at present are not positively geared straight off the bat so this won’t help you. Of course good legal advice needs to be sought before going down this path.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Referred some clients in Melbourne to Dover who wanted face to face and we weren’t in Melbourne for a couple of months so certainly recommend them.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi TTB
If the work is being carried out by a Licensed Tradesman with a written quote and the subsequent post work valuation increases the value by at least the same amount you maybe able to increase the existing loan by 90% of the increase. The funds would only be released post work so tradesman may not be happy.
Other than this is you have no available equity in this or any other property going to be a matter of raising it by any means you can.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Mido
When you say you don’t enough funds to show the Bank what lvr are you looking at.
Odd lender that might do 90% lvr at residential rates so if you all you would need is 10%.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Chris,
All depends on how much you are looking to spend the level of your deposit and the cost of the BA.
I hear stories all day long of BA’s charging 10K – 12K for a 300K property which i find hard to justify when we charge just over half of this and offer a full service.
We certainly have recently purchased a number of properties for forum clients over the last 6 months and there is no shortage of clients on the waiting list.
In saying all of this depends on your financial circumstances as to whether you will get mileage from a BA service.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Sally
Welcome to the forum and congratulations on your exciting new journey into property.
Normal first port of call would be to assess your borrowing capacity and to make sure you have sufficient funds to be able to settle the eventual purchase.
Depending on the level of your deposit there maybe hidden costs that you were not aware of.
When this has been worked out then you can look at some of the features you might want from the loan itself and start to select a lender.
Don’t forget make sure you ask plenty of questions along the way.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Loui will depend on the Terms of the Tenancy and who it is.
Decent tenant will probably reflect in decent valuation.
As commercial servicing is totally different to a resi loan the calculation is not the same.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Cliff
All depends on what you call small development.
How many units are you talking about ?
We have just settled one for 64 units but good experienced developer with plenty of external equity and sufficient pre-sales.
Not always required but anything over 6-8 lots you are going to need some cash or equity.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
A debt is a debt is a debt however if the security property is unencumbered you would have greater flexibility and choice.
Interest rate might also be cheaper depending on the lvr.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Based in Noosa but have offices now in Sydney, Brisbane and Melbourne and the UK.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Who has told you that you are unable to source additional finance ? – Your Bank.
There are many avenues for finance but without all of the facts it is difficult to assess.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi there
No sure exactly sure what you mean by doing a “Few Property Trades” but assume you are referring to flipping (buying renovating and onselling the property).
If this is the case you may find that your Bank consider it as a development style loan.
Utilising equity is often the best way forward however without full details of your personal circumstances it is difficult to comment further.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Sure Prab
Email me and i can respond as it is a PDF article.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
