Hi Mark

Ok not an easy one i must admit.

Couple of immediate issues i can see.

1) Mortgage insurance requirements are that you have a minimum of 3% of the purchase price is genuine savings over the last 3 months and whilst we are not a million miles away certainly a little short at the moment. (Course one lender is an exception to this but they require positive asset base).
2) I am unsure how much the balance on your personal loan is as you mention it is $5K in credit as depending on the balance you might find that your liabilities out weigh your assets and if so this is going to be an issue on a credit score.
3) I am assuming you have access to the First Home Owners Grant which will vary depending on which State you are in but normal maximum lvr these days is 90%.
Few lenders left doing 95% and even 1 or 2 doing 75% but number of factor that will govern this.
4) Your net income after deduction of expenses and living allowance will reduce the amount you can borrow and i think funding your required loan will be difficult.

Sorry to be the bearer of bad news but strongly suggest you try and get rid of the credit card debt and then even look to cancel the card (remember you can always reapply after you have got your loan approved) or start saving madly to try and increase your deposit to say 5% + FHOG.

The mortgage insurance whilst not being a fortune will dent your savings and whilst one or two lenders will capitalise this their credit policy is stringent.

Andrew i think you have missed the whole theme of the ongoing posts.

Simply wrapping or providing Vendor Finance Terms in Qld are not illegal.

Mortgage fraud however is not in my mind entrenterpreneurial.

If you havent got a job but wanted to get ahead would you think writing out false payslips the way forward.

It is very simple the lending landscape has changed over the last 12 months or so and not necessarily for the better for certain borrowers but it falls down to risk as far as the lender is concerned.

All i am simply saying is to be creative you dont have to be deceptive.

Everyone in this room started their investing at some time and whilst I admit it is probably harder to start now with no money and an adverse credit record if you save and be honest with your lender it will get you a lot further in the future.

I appreciate this course of action will not be supported be all and there are often mortgage brokers or Bank managers that will falsify documentation just to get a deal through but i hate to say not this one.

I have stated on so many ocassions over the last 6/7 years on this forum how i got started in wrapping and it was always through full disclosure. If they are not prepared to offer it now does that not tell you something.

Thank god for that.

Are you off now then.  Sommersoft have been warned about you so all good.

Hi aaabbbccc

Couple of quick answers.

You can start your SMSF with any amount however tend to find clients normally have circa $75,000 initially to make it worthwhile.

A SMSF has to submit a Tax return, be audited, lodge with the ATO a Superanuation Levy return all which cost money so when you consider the average retail fund would charge around 1 – 1.5% you can start to see why the minimum balance is required.

Now in answer to your question about whether you should buy in SMSF there are arguements both ways. Again one of the big downsides is the initial establishment costs for the Pty Ltd and the Bare Trust structure. The ATO review these regularly and love to find Trusts that are not complying so you need to make sure you use a legal firm who is expienced and not someone who sells off the shelf instalment packages.

Lenders limit LVR's to around 70% and in most cases they are treated as Commecial loans so the set up costs and legal review fees charged by the Banks are higher than they would be if you purchased in a standard Trust.
 

Hi Andrew

Just a couple of points:

1) I believe most of them also put a clause in the contract so that a default under the second mortgage automatically triggers a default under the first mortgage. Putting this in a mortgage contract is clearly illegal. The second mortgagee certainly has the same right of possession as the first mortgagee however clearly cannot legally place this term in a Contract.
If the First mortgage has been maintained perfectly yet the 2nd mortgage has not then the first mortgagee would not be in default and any action for possession would need to be instigated by the second mortgagee.

And yes i have done dozens of them in Qld.

2) Stating on the loan application form that your being gifted the deposit from the vendor however not disclosing it as an ongoing liability it clearly a case of mortgage fraud. Yes there are certainly a number of lenders who will go to 90% or even 95% with a gifted deposit and no requirement for genuine savings however to borrow the deposit from the vendor is not an acceptable source for a mortgage insurer.

In the good old days about 6 months ago i had several lenders who did not mortgage insure their loans at all and did not mind that the vendor was keeping a second mortgage. 

3) One more…. ummmm…… oh yeah, telling the bank a relative of yours was going to gift it to you, and then them "mysteriously" not turning up with the money at settlement, and the vendor then going ahead with the 2nd mortgage option to "stop the deal falling over. Again another case of mortgage fraud if i have ever seen one.

4) Like it or not you cant register your 2nd mortgage until after settlement so it is not a matter of holding off you dont get a choice.

Certainly done as a business arrangement both wrapping and second mortgages can be done with the knowledge and acceptance of lenders. For our business we started at State Credit Level and then were directed to the National Credit Dept of a couple of the major Banks who did these deals knowingly. As a one off the Banks wont touch them unless as i mentioned they are done on the sly with non full disclosure.

If you have to resort to doing business that way it i will catch up with you in the end.

Why not be Professional about the whole business and present to a lender your complete Business proposition with cash flows, assets and liabilities and a full structured plan on moving forward and assisting clients.

Yes. See section 151 of the Qld Duties Act 2001 but only applicable if it is your PPOR.

SP

Yes if the property was your PPOR then the Stamp Duty would be less than it would be if it is a IP.

In addition you need to consider the possible Capital Gain trigger if you transfer the property into joint names whilst being an IP

Thanks maree.

Sometimes it its the pressure your Broker puts on the lender as much as anything else.
With some of the larger lenders they have an open LMI policy in that if the lender accepts the deal the mortgage insurer will follow suit.

Glenn could also be a change of ING policy as that happens almost every day these days with lenders tinkering with what they will and wont accept.

Good luck.

Not often in the current climate will a lender waive the LMI premium.