Would depend if they were substantially renovated or not.

Elka

Not at all i think you are aware of my virtues of an offset accounts however with such a small loan balance the cost of maintaining an account is unlikely to worth either the higher rate of interest or the monthly costs involved and given the approximate loan balance think a base rate loan would be preferable.

I would then look at bolting on a separate investment line of credit so that Alex can use this to fund deposits and acqusition costs for future IP's.

EH

Hate to say if you got that then you wont now as I have mentioned before.

A memo went around to all their Credit Managers stating that no discounts where to be given unless the total loan was over $750K and then on a case by case basis and subject to the approval of the National Credit Manager. 

I have put up a couple of deals to them for $1M + and they have over 0.75% and these were high net worth clients.

Might as well give them to the NAB and get 5.04% from day 1 on any loan over 250K. 

Winner sorry to hear about your situation.

Rather than offer you any advice i would be talking with your Bank immediately as even if you sell the property it is unlikely they will allow the sale to go through based on the fact that they will not release the Title.

I would be talking to them now to see whether you can formulate a repayment plan to allow the sale to happen in the first place.

ST

Wont comment on the timeframe as this will be determined by your Local Council Authority and they are best placed to answer that one.

With regards to your eligibility the new property will need to have its own Title for you to claim the FHOG as otherwise the property will be in your parents name and you wont qualify for the FHOG or indeed a loan to construct.

Given this i would be first seeing whether subdivision is possible rather than seeing how quickly you can engage a builder.

Again hate to disagree with Alan but i am unsure whether he realises the Tax implication of using a redraw facility on your main PPOR loan.

Without question as a Financial Planner i would tell you that you need to keep the loans separate.

Yes there are many competitive basic rate products at around sub 5%.

With regards to source of deposit i can think of 2 mortgage managers who offer exceptional Base Rate products that do not ask where the deposit has come from. As long as the loan is not mortgage insured (Be wary many small 2nd tier securitised lenders mortgage insure every loan irrespective of the LVR) you cannot go far wrong.

On a separate note thanks for the endorcement Bootlace. I like to think as a fellow investor myself with a small portfolio ….. here in Brisbane i do now after 20 year plus in the industry what investor require and it more a suitable structure rather then a cheap loan product.

Hi Alpha

Not at all i have dozens of NSW forum clients so feel to drop me an email and we can start communicating.

Alex

Firstly welcome to the forum and you are an enviable position.

To answer a couple of your questions raised:

What are the implications if I purchase a property with cash without a mortgage? Is it bad or good? I read somewhere that it has tax implications, but I do not quite understand it and do not know how to relate that in my case. FYI, I am currently working with salary of $45k pa (just started on January). Nothing wrong in paying cash or having a small mortgage on the property as you can always look to use the available equity to raise funds for a deposit on your first investment property.

– If I pay the property with cash and not a mortgage. How do I claim the FHOG? Is this something I have to do myself?

There is nothing to lodge your lodging the FHOG application yourself  (just make sure you have complied with all of the requirements as you wont have an appointed agent to check it for you).

– Is it normal for people to borrow less than $100k for a mortgage? I guess so. Silly me. It is just that I had always heard people borrowing a much larger amount of money (> $200k). No not normal at all as most people dont have a father who is so generous. Most FHB struggle to come up with a deposit so cant buy their ist IP for years as the gradually build up their equity base.

– Assuming I am to borrow $70k – $130k, does anyone have any recommendation on a home loan product out there that suits my situation? Remember what may suit your situation now may not suit your situation in the future especially if you want to buy further investment properties.

I do not need a package product maybe as I am trying to avoid the annual fees. But I am also looking to pay off the mortgage as soon as possible. So I will probably arrange the term of the loan to be shortish (maybe 4-5 years). Anyone has any recommendations?

Probably need a few more details to comment but a standard no frills typed loan would seem to be the way forward.
As i said you need to think not only now but in the future as well.

There are still 1 or 2 lenders who will accept HDT structures but they are a dying breed.

Just dont get caught and find that you are boxed into a corner because they put the rate of interest up and you cant refinance elsewhere as you have no choice.