Forum Replies Created
A cross collateralised loan is where the loan is supported by multiple properties or securities and is a definate no no.
Your Mortgage Broker should be able to structure the deal to ensure they are not crossed.
Do you have any equity in the current IP ? If yes i would be using this to access your deposit.
If you intend to reside in the new home short term you would want the offset account to be linked to this loan rather than a deductable IP loan.
110% lvr is available if you have suitable equity in the original property.
Richard Taylor | Australia's leading private lender
A cross collateralised loan is where the loan is supported by multiple properties or securities and is a definate no no.
Your Mortgage Broker should be able to structure the deal to ensure they are not crossed.
Do you have any equity in the current IP ? If yes i would be using this to access your deposit.
If you intend to reside in the new home short term you would want the offset account to be linked to this loan rather than a deductable IP loan.
110% lvr is available if you have suitable equity in the original property.
Richard Taylor | Australia's leading private lender
JJ
All comes to the tax deductability of the loan interest.
Again without being funny unless your Broker is a Licensed Financial Planner he should not be discussing the merits of an offset account with you.
Richard Taylor | Australia's leading private lender
Poto
Some lenders charge a higher mortgage insurance premium if you go IO from the start so another reason why your mortgage broker should have a good knowledge of structures as well as merely lenders loan products.
Richard Taylor | Australia's leading private lender
Wow what a well timed post just happens to coincide with a property seminar i am holding !!!!.
Richard Taylor | Australia's leading private lender
All depends on the LVR and general security and feel of the deal.
Richard Taylor | Australia's leading private lender
Yes given the scenario certainly would suggest IO with 100% offset.
if you intend to live in the property for a period of time you wont want to be depositing funds (salary, rent and the like) into the original offset account as you might as well save interest on the non deductable loan whilst you reside in it.
Just make sure the loans are not cross collateralised and ideally you dont want to use any of your offset funds as deposit.
Structure it correctly and it will work with you for years. Never trust your Bank as they will have no idea.
Richard Taylor | Australia's leading private lender
Dont want to have to correct a fellow broker but Anz maximum lend on any security is only 90% LVR and they deduct LMI from the 90% not add it to the loan as per most lenders.
Personally I would go the Line of Credit option but everyone to their own. Just make sure he understand how to structure the loan so that the securities are not croos collateralised.
Be suprised how many brokers have absolutely no idea when it comes to loan structuring.
Richard Taylor | Australia's leading private lender
CBA have tightened up there lending policy considerably so not suprisingly they declined the deal.
Would need specific information to advise you whether the deal could be done or not.
Richard Taylor | Australia's leading private lender
CBA have tightened up there lending policy considerably so not suprisingly they declined the deal.
Would need specific information to advise you whether the deal could be done or not.
Richard Taylor | Australia's leading private lender
Djs
Dont want to be the bearer of bad news but unless you are putting in cash on all of these deals the mortgage insurers will be the ones who stop you not the Banks.
Both mortgage insurers recatorgorised the whole of the Country over the last couple of weeks and are slowly pulling out of cover on many many small regional towns.
Richard Taylor | Australia's leading private lender
Which areas are you looking at and do you intend to be paying cash or using your own Australia equity here to leverage from .
Richard Taylor | Australia's leading private lender
Ok well me things you should get some professional advice before you buy the next property as for tax and loan planning a DFT is something you definately need to consider as a buying entity.
If you have more than 1 dependant or are thinking of having further children the benefits get greater as you go along.
Richard Taylor | Australia's leading private lender
Are they First Home Buyers ?
If so why not sell it to them on an installment contract basis with the terms you mention above.
In addition you assign the $17,000 FHOG to yourself and this is payable after possession so another lump sum payment.
The $20K should be placed in a Term Deposit A/c in your name or at least in your Solicitors account released in 12 months time.
A good lawyer will be able to draw up the terms contract for you and could well be a win win situation for you and them.
Richard Taylor | Australia's leading private lender
GOM
You are so right.
Unfortunately for GOB the CAR rate is from day 1 and unless he is in Qld the LMI is a higher than $4600. (Qld has the lowest Stamp Duty on LMI premiums) when other lenders are $400-$500 cheaper.
With $3000 sitting in the savings account every single day for a year he will be actually loosing $3 a month when the Bank charge him $15 / month and that assumes we see no further reduction in interest rates for the next 12 months.
Assuming there is moderate capital growth in the property over the next few years before he breaks the contract he might still be up for LMI again and if there is no CG then to refinance a 95% lvr is not easy. (Well let us just say your options are lmited).
Guess you cant some people that are so blinded by the lowest interest rate they forget to look at the other features.
Richard Taylor | Australia's leading private lender
Everyone to their own Go but hope you understand the true costs with the Rate Tracker loan.
Forget the advertised interest rate of 4.92% as the CAR rate is comparison rate of 5.61% and not cheap.
Secondly might want to check the PMI LMI rate as at 95% it is more expensive than most.
If you take the 100% offset account which costs $15 / month you would certainly need a fair amount in the account to even break even each month.
Interest only available in certain circumstances.Also leave yourself plenty of time for settlement as they have to be the worst lender i have ever come across when it comes to documentation and settlement.
Richard Taylor | Australia's leading private lender
Duplicated
Richard Taylor | Australia's leading private lender
Rather than put it in your wifes name why not put it in a Discretionary Family Trust as this will give you extra options as well as good asset protection.
Richard Taylor | Australia's leading private lender
Definately worth changing – Yes
Richard Taylor | Australia's leading private lender
If it is positvely geared I would establish a DFT if it was negatively geared and you need to claim the interest, Dep, BWR etc against Tax then a UT is the recommend choice of Trusts.
Richard Taylor | Australia's leading private lender
