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Terry is correct investors who used to live off equity are finding those days have gone as most lenedrs require some form of evidence if it is merely a stated income on the application.
With fewer lenders offering such products they can rate the risk accordingly and charge appropriately.
Richard Taylor | Australia's leading private lender
Hi Nic
The reports are individual property based so email me an address and I can send you back a report.
Doesnt like the broker you are using has any idea on how to structure an investment loan.
Richard Taylor | Australia's leading private lender
Nic
Nothing wrong with the Anz Breakfree package but the loan needs to be structured correctly.
I personally would not have the Chuware property on P & I even if was your old PPOR as interest only with offset is the way to go unless you have another PPOR loan.
Do not take out 110% of the new purchase price on the new property offering then security of Carlton.
You need to keep things separate and the Bank will have NO Idea how to structure it.
Personally I would use a mix of a Line of Credit and Interest only loans with an offset account and definately not unless you have no choice cross collateralise the securities. The Bank will encourage you to do this but it certainly isnt in your best interest.
Richard Taylor | Australia's leading private lender
Hi Nic
Yes you can certainly do so.
Sounds to me though like the loans have been cross collateralised and not a great way to keep going forward.
If you are going to look to keep moving then i would look to uncross the loans first.
Richard Taylor | Australia's leading private lender
Idea is not so far out at all but i think the number of Vendors willing to take such a deal will be limited.
Many of the Vendors will have a mortgage on their home and will be a matter of them having to take on 2 mortgages until you eventual settle.
Alternative would be to take an 80% LVR and 20% Vendor finance loan which maybe more attractive to them.
Anyway good luck and let us all know how you go.
Richard Taylor | Australia's leading private lender
Stamp Duty is payable on the Instalment Contract price in accordance with the Terms of the Stamp Duties Act in your State.
In Qld it is payable 30 days after the date the Contract goes unconditional and prior to the date of possession.
Richard Taylor | Australia's leading private lender
Thats exactly right Jimmy and is why you would never terminate under the B & P clause unless the property had some shortcomings.
Terminating under the finance clause is an acceptable way out as the finance needs to be on Terms acceptable to the purchaser.
Richard Taylor | Australia's leading private lender
As the registered owner unless the original Development had a management right condition or similar there is no reason why you cant use any property manager for your rental.
Richard Taylor | Australia's leading private lender
Hi Jenny
1.As a guideline, how many basis points in interest rate above the banks' standard variable home loan rate should I offer to the seller? Varies dependant on the Contract but most of the ones we have done have been set over the RBA Cash Rate rather than the Banks standard variable rate.
2. Do I need a special property lawyer to draw up the vendor finance contract/agreeement and do the settlement or just a normal conveyancer will do? Most lawyers would have no idea and is certainly a specialised area.
3. What would be the reasonable loan term to ask the vendor for? I assume you are looking at 100% finance so 25 years is not out of the question. Of course the Vendor can only say NO.
4. Is there any traps that I (the purchaser) need to be aware of? How well do you know the Vendor ?
5. Can I ask the vendor to provide a periodic statement similar to the banks' statement? The Vendor must comply with the Terms of the UCCC so certainly will need to provide you with regular Statements.
Richard Taylor | Australia's leading private lender
Max LVR would be 60% so if you have equity in your own PPOR then you will probably get this upto 100% of the new IP property.
In saying this with every traditional loan you are required to state an income even if evidence is not required to be produced.
More details would be required to provide an accurate answer.
Richard Taylor | Australia's leading private lender
Denis
The other important factor with an interest only loan is the flexibility which is key.
You may decide to buy a house and live in there for ever and a day but alternatively you might just use the first house as a stepping stone to buying a bigger home in a few years.
Interest only gives you choice.
Richard Taylor | Australia's leading private lender
And never take financial advice from Builders.
Richard Taylor | Australia's leading private lender
No i agree $1600 + GST / Sq M would be about right for Bris at the moment.
Richard Taylor | Australia's leading private lender
Developers dont pay CGT their income is classified as Trading Profit and therefore can write off all of their expenses against it.
There are very few ways of reducing your Tax liability below 30% especially if the work is undertaken within a Company structure and a decent profit level is made. Trick is limiting it to 30% only by using retained earnings.
Course if you look to buy and hold something for 366 days in say a SMSF the CGT liability is only 10% and this is what i like to do.
Richard Taylor | Australia's leading private lender
Thanks Andrew as always appreciate the wrap.
Richard Taylor | Australia's leading private lender
Certainly you dont need to cross collateralise the securities to be able to borrow 100% + of the purchase price of any new property and it is a strategy we would rarily recommend.
Given the equity you have in your current property and as long as you feel you can service any new borrowing then using your own equity opens up a number of doors to either purchase a new investment property or another PPOR.
In saying this remember that interest on a new PPOR will not be Tax deductible so you will need to service the entire debt from after tax dollars.
Richard Taylor | Australia's leading private lender
If you intend to submit numerous offers i would draw up a standard fax format asking the agent to prepare a formal purchase contract with a list of special conditions which are to be included.
The standard fax should include details on:
The purchaser (individually / Trust / Company structure) details.
1) Whether you wish to waive the Cooling off period (not recommended).
2) The number of days you require for finance and building inspection.
3) Settlement date.
4) Other Special Conditions.
5) Deposit amount offered.
Once you have received your Building Inspection back you can either terminate if the report is not acceptable or try and renegotiate the terms / price etc. Of course the Vendor does not have to accept this.
You can put in as many offers as you like.
Richard Taylor | Australia's leading private lender
It all depends if you intend to sell the current property ?
Richard Taylor | Australia's leading private lender
Wow denny 6.21% is a shocking rate of interest even with the loan amount you currently have.
Richard Taylor | Australia's leading private lender
Will Lender A not require some info on where the money is being spent? Yes they will and some lenders will say NO.
Thankfully there is still some competition left in the finance market and some lenders still have no issues with "Cash Out".
Your understanding is correct from there on in.
Richard Taylor | Australia's leading private lender
