Forum Replies Created
Are the loans cross collateralised and what is the details of the other IP.
Do you own the land outright ?
Is any of the PPOR loan tax deductible or was the entire loan used to purchase the property.
Richard Taylor | Australia's leading private lender
Why not switch it to Interest only and then link it to a 100% offset account.
Deposit the $5000 into the 100% offset account and be charged interest on the net balance.
Richard Taylor | Australia's leading private lender
Dont necessarily dispair.
As long as you have good income a 90% loan would appear to be satisfactory dependant on what you are looking to purchase.
A couple of lenders will go upto 100% on an IP on a standalone basis and without additional security.
All you would need to find is the acquisition costs.
Richard Taylor | Australia's leading private lender
Peter
Yes certainly given the equity in your current properties securing a new IP for 400K should not be a problem.
Given your current marginal tax rates you may want to explore the option of purchasing it in Trust as the deductions will be limited so iniitially will end up costing you each week but the added bonus of the Asset protection and the ability to distrubute the income down the track is a big plus.
Just be careful about taking advice from anyone who is not licensed to provide Financial Advice.
Richard Taylor | Australia's leading private lender
To utilise the 50% of profit (for CGT purposes) from the sale of the Port Elliot land, we have to wait 12 months from settlement on purchase which was in January this year. We’re sure it’s in our interest to quit this block to free up funds for deposit(s) on IP, but are unsure whether to sell now and quit any loss or wait till after Jan 2008.
Just in case you were not aware the Capital Gains clock works on purchase date not settlement date. Nothing to stop you listing the property for sale and signing a Contract now if the date you signed the purchase contract was over 12 months earlier.
Richard Taylor | Australia's leading private lender
Peter, A couple of answers for you
Q) “All loans should be IO” and the mechanics/thinking behind “a 100% offset account on one loan”
A) An interest only loan will maximise your borrowing capacity (Although some lenders will still assess your borrowing capacity on a principal & interest basis) and give you more disposable income each month. Any surplus income could sit in your 100% offset account and would reduce your monthly interest burden.Q) why you advise us to use “the big banks now” rather than other non-bank lenders
A) Many of the non bank lenders will mortgage insure every loan irrespective of the LVR. Whilst the premiums may be paid by the lender you are using up your borrowing capacity with the mortgage insurers. Keeping the loan to < 80% with a banking institution will maximise your non mortgaged insured debts and mean that if you need to utilise lodoc / nodoc lending in the future you will still have the ability to do so.
Richard Taylor | Australia's leading private lender
Hi Joseph
Yes correct however just be careful in doing a redraw to esnure the interest is deductible if you are using the funds for investment.
Richard Taylor | Australia's leading private lender
Matt
Difficult if not impossible to get 3 different lenders to lend against the units when they are on a single title.
There are many reasons why you wopuld not wish to strata title the block but as Alistair mentioned a 90% loan on the 3 units on 1 title should be easily achieveable.
Richard Taylor | Australia's leading private lender
Thankfully i see his membership has been blocked – at last.
Richard Taylor | Australia's leading private lender
I disagree.
The credit crunch has little to do with full doc loans. You certainly would get more than 60% LVR on a 3 pack of units subject to income and valuation.
Richard Taylor | Australia's leading private lender
I agree with Wealth.
I use my SMSF to undertake a lot of good cash flow ventures, whether it be wrapping, buying instalment warrants or land subdivisions.
Richard Taylor | Australia's leading private lender
Just to add to V8's comment the other thing you need to bear in mind is the clawback period.
With some lenders the entire amount of the commission received by your broker can be clawed back if you repay your loan within the first 18 months.
Some lenders phase the commission period in from Month 1 to 18 months others take back the lot.
Not sure of too many other professions where you get paid but could loose the lot 17 months later.
Richard Taylor | Australia's leading private lender
Sure Cameron will not have a problem.
Give him a call as i mentioned.
Richard Taylor | Australia's leading private lender
The only Shared Equity loan currently available in Australia is funded through Adelaide Bank and their range of mortgage managers.
They are available for both first, second purchases as well as refinancing although are only available on full doc loans.
Loans are limited to a max of 95% LVR with upto 20% being provided on a nil interest rate by Rismark.
Adelaide Bank charge their standard variable rate on the 75% loan amount.There are both post code and monetary $$$ restrictions.
Richard Taylor | Australia's leading private lender
Dependant on the security you may need between 25 – 35% deposit.
Many of the normal US lenders have withdrawn their Foreign National products due to the sub prime crisis.
There are very few US lenders that will fund these loans and many are State specific.
Richard Taylor | Australia's leading private lender
Wow interest rate is not cheap but i guess this is due to the security being slightly on the small size.
Cameron is based in Melbourne and is a regular contributor to the forum. Why not contact him and see what he can do for you.
Richard Taylor | Australia's leading private lender
Wrapping is not illegal in WA but an Annual Credit License is required. Applications can be made through the Office of Fair Trading.
Richard Taylor | Australia's leading private lender
Warwick
Have to disagree with a couple of points:
My wife also earns an income of about $700 a week cash in hand (so she couldnt go in the loan with me).
A) Being paid in cash is not a problem as she would still receive a Payment Summary and have to submit a Tax return. Obviously if she is defrauding the Tax Office by not declaring the income then that is a different issue.
With regards to Mark's Statement about going for a Lodoc loan I do not think he understands the purpose of such product. Lodoc loans are not a method of falsifying your income in order to increase your borrowing capacity.
It is very simple if you cannot afford it do not enter into such a contract until your circumstances have changed.
Richard Taylor | Australia's leading private lender
Yossarian wrote:
Trakka,
Also, I'd argue that loans that you guarantee are not your liabilities. If your son or daughter buys a car and needs you to go guarantor to get them the loan, do you think that the parents, when applying for their own mortgage, should declare that car loan on their statement of assets and liabilities? In this case, the liability is being counted twice, as presumably the son/daughter would declare the same debt on their position statement if applying for their own mortgage? Why should liabilities that are backed by guarantees be counted twice?A) Of course they are included and need to be declared unless you intend to submit a fraudulant application.
Richard Taylor | Australia's leading private lender
Erik
If you come here often and dont mind a trip to the Gold Coast call Steve Hodgkinson who is a partner at the Gold Business Group in Southport.Steve has been my Accountant for 12 years and is a current forum member and property investor.
He can be contacted on 5532 2855. Tell him i sent you as most good property Accountants are not taking on new clients.
Richard Taylor | Australia's leading private lender
