Forum Replies Created
The 3 lender Terry has mentioned have some of the only true transactional offset accounts in the market.
Forget MISA as it stands from CBA it is not fully transactional.
Anything else is not as competitive.
Richard Taylor | Australia's leading private lender
To be honest i think your average Financial Planner will have no idea and will charge for little or no valid or constructive advice.
One consideration is what do you think Brisbane house prices will be in a years time…. I have an idea and they wont be where they are now.
Richard Taylor | Australia's leading private lender
Totally agree with Terry. Why oh why would you use your savings as a deposit for the new property.
Running the business through a Trust structure will give you the flexibility each year to decide which one of the beneficiaries receives the income distribution and you certainly would be able to manage your Tax issues.
Has this Broker ever purchased an investment property as it doesnt sound like his advice is all that sound.
Even with your wife paying no tax the savings should be sitting in an offset account rather than separate savings accounts.
Richard Taylor | Australia's leading private lender
I am with GOM i use NRMA on a fair amount of my properties.
Richard Taylor | Australia's leading private lender
Not sure who suggest the 95% loan but if it was your mortgage broker i would be steering well clear.
You are better off borrowing 100% plus costs on your IP and using the extra funds to pay down your PPOR.
Personally I would get your parents to take out a separate loan pay down your PPOR with these funds and then split your home loan to fund your deposit.
You can then pay down the balance on their loan as qucikly as possible without effecting the deductability of the loan interest.
Also means they are free to use their security for their own means rather than wait forever and a day for you IP to go up in value.Richard Taylor | Australia's leading private lender
Mitch
It all depends on whether you intend to sell the first place or not as to the process steps involved.
Richard Taylor | Australia's leading private lender
Hi Rafael
Firstly welcome to the forum and I hope you enjoy your time with us.
Couple of ways to tackle the issue:
1) Some lenders actually offer a payment holiday period which varies from 3-6 months dependant on the lvr and how long the loan has been running with them.
2) Look for an interest only loan and place the balance into a 100% offset account and then use the saved funds to support the interest repayments once your circumstances change.
3) Go fo a higher loan to value ration and keep the balance in savings as 2) above.Just need to bear in mind that over 80% you will be charged mortgage insurance and this may well be greater than the $7000 FHOG so may eat into your current savings.
One issue of course with discussing the strategy with a Bank directly is that if they are aware that your wife will be giving up work then very unlikely they will factor her income into the equasion and decline the deal especially if they feel you are unable to support the lending in your own right.
There
Richard Taylor | Australia's leading private lender
Enzo
On the first part sounds like he might be better off with 80% of cost rather than 65% of net GR value.
Second part – If all else is equal i think i would be looking to change Banks as 80% of land value is readily available.
Richard Taylor | Australia's leading private lender
Before we comment can you tell us why you wish to sell and wanting you are ultimately wanting to achieve.
Just makes the response easier to comment on.
Richard Taylor | Australia's leading private lender
Hi goodboy
Firstly welcome to the forum and I hope you enjoy your time with us.
Couple of comments below:
1. I sell the property now and forget about FHOG ($21,000) and stamp duty concession. Since the property is now $300k, I can earn about $5k ($20k price difference – $8k stamp duty – $7 saling cost). Do I have to pay CGT for $5k? at what rate?
CGT will be paid at your highest marginal Tax rate for the Tax year you sign the sake contract ie. Sign a Contract In Jan 2011 and the Capital Gain will be added to your income for the 2010/ 11 Tax year.2. I can buy the property with all the benefits of FHOG ($21,000) + stamp duty concession ($8k) by dec 2010. Then I can choose the following options:
2a. Leave it empty for the first 12 mths then rent it out! (since I have a job in the different state, it is clearly illegal so I don't want to do it…) Disgree. If you purchased the property as a PPOR with every intension to occupy the property then i cannot see any reason why you cant still nominate the property as a PPOR even though you are working in another State subject to you not buying another PPOR. I have many clients who own a property in say Brisbane but live all week in the mining areas and occassionally come back to Brisbane. It all boils down to the original intent.
2b. Rent it out for 11 months, then if I decided to come back to this state, then I can live there for 6 months and everything is fine. (Can I use negative gearing for this 11 mths of period??)
Yes for the period the property is deemed as a rental property you are entitled to lodge a claim for the deductions.2c. Rent it out for 11 months, if I cannot come back I can sell it and pay bac k FHOG and stamp duty (I might be able to sell it at higher than $300k by then. Also, I have "utilised" $30k of free money). However, I might not be able to get future FHOG of $7k when I really can claim it.
You might wish to check the Stamp Duty concession as often this varies from the FHOG conditions and differs for each State,3. I can but the property without all the benefit and make it my first IP. This way, I can claim FHOG when I purchase the new house in the new state and as well as negative gearing benefits (tax deduction). However, I will never get $21k FHOG and with current rate of $7k, I basically lose $14k to start with……
True
Whichever way you go i would ensure the loan is interest only with 100% offset account attached as clearly the eventual use of the property is unknown and you will need loan flexibility.
Richard Taylor | Australia's leading private lender
Away from the name to put on the Title when you acquire this property (and Terry has outlined some alternatives) are you sure that your serviceability will be sufficient to gear to this level of borrowing.
Without limited information it is difficult to provide an exact answer but seems to be some potential borrowing issues.
Just make sure your Broker structures it correctly to avoid any future issues.Richard Taylor | Australia's leading private lender
If the CEO is answering the phone then maybe his Company is not long for the independant world and you soon may find you are owned by someone else.
Richard Taylor | Australia's leading private lender
GOM they do an GE have a 40 year term but i was saying in the main most IO loans have a limited term of either 5 or 10 years.
Richard Taylor | Australia's leading private lender
Especially one who charges $660 for the valuation. Some friend !!
Richard Taylor | Australia's leading private lender
Unlikely you will get a 25 or 30 year interest only term so relates solely to the balance of the Term once the IO period expires.
I would go 30 years as long as serviceability is not an issue.
In saying that i would rather go 10 years interest only over 5 and even be happy with a 20 year term to achieve this.
Richard Taylor | Australia's leading private lender
There are certainly lenders who offer standard resi loans with Corporate Trustees albeit the 2 you mentioned do not.
Not aware of any lenders that restricts lvr to 80% when lending to a Trust.
Richard Taylor | Australia's leading private lender
Why wouldn't you get a valuation undertaken by an acceptable valuer to your lender and commission this yourself in advance so you have a good indication as to the likely figure you can bid upto.
Richard Taylor | Australia's leading private lender
Andy
Dropping the lvr to 80% or below will not work with a small on non bank lender as in some cases ALL of their loans are mortgage insured.
Richard Taylor | Australia's leading private lender
Hi Richard
Try Steve Hodgkinson who is a partner at the Gold Coast Business Group in Southport.
Steve has been my Accountant for nearly 15 years and is an expert on Property Structures as well as being a great guy to deal.He is a forum member and has helped literally dozens of my forum clients.
Tell him i sent you as most decent Accountants are not taking on new clients.
Richard Taylor | Australia's leading private lender
Hi Anthony
As Terry has mentioned in the current climate LMI can be like that.
QBE PMI are having a run of querying Credit Reports and irrespective of what you say more than likely will not budge.
Get you Broker to put the deal to a lender that uses Gemworth.
Richard Taylor | Australia's leading private lender
