Forum Replies Created
Hi Chris
To access the equity you will probably only be able to draw upto a 90% lend so certainly need a little more appreciation.
If you stay with the same lender LMI would be charged on the total loan and then a credit given for what you have already paid.
With a new lender you will merely pay in on the new loan.No there is no lender left who will capitalise the Stamp Duty to the loan.
Max lvr would be 95% + LMI.
Richard Taylor | Australia's leading private lender
You cant blame the lender you want development finance at residential rates yet arent prepared to pay for it.
I have done 101 projects around Brisbane in the last 15 years everything from a 2 lot subdivision to 55 units at Nundah and have always found it is easier to be honest with the lender and accept the higher rate, fees etc so that the deal happens.
Quibbling over a percent here or there and an application fee will not build a reputation with any lender in the long term.
Richard Taylor | Australia's leading private lender
Might be add my twopence worth as i have done 1 or 2 wraps over the last 14 years.
1. How much are the vendors repayments above the interest rate applied to your money borrowed (is it more than a P&I repayment). i.e. what sort of margin is the monthly cash flow based on?
We base all of ours over the Cash Rate rather than particular Banks variable rate. However normally equates to 1.5% above SVR
2. Who pays the stamp duty?
The wrapper pays the duty on the acqusition and then the wrappee pays it again. The date for payment varies from State to State.
3. Do you charge LMI (and what is the banks view of this arrangement). Or is this more or less something the banks do not want / need to know?
No you cannot charge LMI but can certainly charge a risk fee etc (normally factored into the onsale price) All of our wraps have been done full disclosed to the Banks however admitedly this was at National Credit level due to the number and size of the business. I am not aware of any lender who currently is prepared to accept such deals knowingly.
4. Are the deposits received above and beyond the purchase price? i.e. clear profit?
Any deposit paid reduces the loan balance the wrappee has to you but you are not required to pay down your loan with it and can use it for deposits on future properties.
5. This may tie in with the question above, the end profit, is this price negotiated on the present days value or is it taken on the value of the real estate on completion of the contract?
Normally set out in the original instalment contract however we have a couple of deals we have on a shared ownership style basis.6. I noted somewhere you increase interest rates throughout this period of the contract, has this been established up front and is it in your best interest to keep these projects turning over? i.e. increase rates to a high level?
The interest rate margin is set out in the original contract (unless a fixed rate is negotiated) so when the cash rate moves so does the interest rate charged.7. How is the FHOG achieved when the vendor is on the title and pays the stamp duty? Is this akin to building a granny flat out the back of Mum and Dad's home and applying for the FHOG?
The payment of the FHOG varies from State to State. In some cases it is paid on the possession date in others States it can be minimum 12 months later +.8. Can this deal be done if you have 100% borrowed money? Similar to Q3 above? But is it profitable at a high LVR?
Yes course if you borrow a 100% + at 6% and then onlend this to say 120% at 7.5% it can be very very profitable.Richard Taylor | Australia's leading private lender
Certainly worked with an excellent Buyers Agent that covers Sydney, Central Coast and Newcastle who is also a forum member so let us know if you want his details.
Richard Taylor | Australia's leading private lender
As Greg mentioned i also done a 95% lvr for a FTB in Mt Isa who had 1 default and took some doing but we got it over the line and has settled now.
Many of the lenders are back to 90% max.
Had a couple of 95% approved recently for existing Westpac clients but as Banker mentioned not easy meat.
Richard Taylor | Australia's leading private lender
Banker just had a deal declined by CBA as they said they had too high a concentration of current lending in the Town.
Thankfully NAB swallowed it up.
Getting a real problem in the Qld regional towns.
Richard Taylor | Australia's leading private lender
I think at 95% lvr + LMI in Mt Isa you have buckleys given your potential Credit score and unsecured liabilities.
I would focus on discharging these first as it will improve no end your chances.
Richard Taylor | Australia's leading private lender
If you feel the Agent is negligent in regards to the serving of the appropriate Form 12 or 13 i would be looking to the REIQ as a place to start for compensation.
Richard Taylor | Australia's leading private lender
For Oxenford i prefer Herriots.
Accepted by quite a few lenders as well,
Richard Taylor | Australia's leading private lender
Yes there would be but they would secured against other properties.
You would still be 100% geared.
Richard Taylor | Australia's leading private lender
At under 65% you can get less than 6.49% but is interest rate everything.
Richard Taylor | Australia's leading private lender
Frugal One
No not too good to be true at all.
In fact as long as you have the equity and serviceability you could use property 1 as security for all loans as long as the lvr is less than 80 -90%.
Whether you would or not is a different matter.
Richard Taylor | Australia's leading private lender
Yes totally achievable but whether you can find a Vendor to consider taking a 2nd mortgage is a different matter.
I assume you can cover your acqusition costs.
Richard Taylor | Australia's leading private lender
Bernard
At the moment probably around 11.5%
Regretfully at the moment there are limit lenders who will refinance lodoc so you need to be prepared to be in for the long hall. Lodoc 80 is a different matter.
Richard Taylor | Australia's leading private lender
Which part of the Coast?
Richard Taylor | Australia's leading private lender
I am getting more confused by the minute with this question.
If you win lotto on the eve of the Settlement and never have to work again as long as the Title is in your name and you comply with all of the other requirements there is no reason why you would not qualify for the FHOG.
It is not Asset related or indeed income tested so whether you are paying a loan to your parents or the local loan sharp makes no difference whatsoever.
Richard Taylor | Australia's leading private lender
Greg
ASIC wont need to audit every Broker as this responsibility is being taken by the License Holder.
If you are a Credit Representative you can expect regular Audits from the Licensee as his / her neck is on the line.
Certainly my Aggregator is offering this option however i understand that many are leaving Brokers in limbo to plough the legistlation and paperwork themselves.
Richard Taylor | Australia's leading private lender
Hi Terry
Very good question.
I get many referals from one of the Major Banks asking me to go and provide the client with a Financial Advice Statement in relation to their Reverse Mortgage.
I think come July 1 this style of loan would certainly have to come into question as the clients PPOR is definately at risk and this is the backbone of the Responsible Lending obligation.
Richard Taylor | Australia's leading private lender
Maybe not here as it is called Spam and Jaffa was around would be banned.
Richard Taylor | Australia's leading private lender
Or post July 1 No lender is going to lend you money where you cannot demonstrate you have sufficient income to service the debt.
Richard Taylor | Australia's leading private lender
