Zig

You are referring to the St George Portfolio loan under the Advantage Package.

The loans HAVE to be cross collateralised as a condittion of the package and is the long term death nail for investors.

You would be wise to steer well clear of this product as it will give you nothing but grief the more preporties you purchase.

If you ever switch the PPOR to an IP you again have immediate Tax issues.

There are better products out there without the limitations, costs and restructions placed upon you by the Dragon.

Ok slightly different situation.

I do not like the Family Pledge product as it has numorous issues for both parties.

You would be better off for your parents to take out a individual loan for 20% of the purchase price and then gift this to you and you arrange a stand alone deal for 80%.

That way they can still utilise the balance of the equity in their property and are not limited to being able to only sell or refinance if your property can support the increased borrowing.

Would be no LMI and casual employment would not be an issue.

5.2% is standard rate so they are not do anything special for you.

GO,

Funds invested in a Bank account will at present earn you very little in the way of interest and that interest will of course be considered Taxable income.

Even if you have no non deductible liability and on the basis that you do not need the interest to live off the offset funds are effectively paying you interest at the same rate as your home loan is being charged. Difference being that you do not receive the income.

Ever dollar will offset against any potential cash shortfall and will be savings you money.

Should you purchase again then merely switch the offset account to the new loan and save further interest this time on a non deductible loan. 

As long as the Title is Freehold then there will be no extra costs.

Buildings Insurance will be your responsibility where normally in a Body Corporate arrangement this cost will be covered in the administration fund expenses. 

Current investment rates are less than 5.81% so might want to re-work those figures as the deal will be more attractive.

If it is positvely geared i would not be buying in your sole name if you are on the top marginal tax rate. 

Trust structure would certainly be an option.

Also look at how you structure the loan to maximise your savings.

Westpac have withdrawn their 85% no LMI product and ING still charge a risk fee instead.

There are a couple of others who will go higher without LMI however as mentioned still charge a fee.

Maybe cheaper depending on the loan size and location of the property.

Jayson

Sorry mate there lies the problem.

Wont get 100% of asking price plus reno costs and cant borrow against post renovation value.

After the announcement yesterday about the mortgage insurers re-catorgorising the Countries post codes you might find that 4818 needs at least a 5% deposit maybe more come post March 09.

A valuation is based on recent local comparative sales so should be pretty close to the selling price.

I hate doing it but if you cross collateralise you might be able to get 95% on the refi.

No unfortunately without property security / family guarantee you will not be able to borrow more than 80% without mortgage insurance.

In saying this some lenders charge a risk fee instead upto 90% some to 95% which may work out cheaper than LMI.

Pays to shop around a little.

Your Broker should be able to help there.