Gus

Not exactly sure what the question is but am assuming it is whether you could obtain development finance on this scenario.

As we dont have any actual figures it is difficult to give an exact answer but if you work on rule of thumb being that the lender will go upto 70/75% of Gross Realisation then you will not be too far away.

Not sure i would structured it with CBA as a X collaralised loan as they are a little expensive on the development finance front but you will just need to work with them given it is too late to refinance.

Construction finance is not that difficult to obtain from the right lender as long as the LVR is within their boundaries and you ahev some pre-sales or past experience.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

Magic

You maybe able to utilise a lodoc / nodoc style of loan. They do not need to guarantee anything and only your name would be on the title.

Your parents would need to draw the loan down and the funds would need to be ready for settlement. All depends on the lender whether funds are required up front with the application.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

Hi magic

Couple of issues here but easily sorted out.

Firstly why are your parents going to act as Guarantors?

I assume that it is either to utilise their incomes in order to assist with your borrowing capacity or to utilise their security due to lack of deposit.

If it is the case that you are wanting the Bank to take their income into consideration then their needs to be a financial benefit to them and most lenders would want them to be on the Title. This is not what you want as you will be unable to claim the FHOG as they have already owned a property.

If it is for security purposes then would be no real problem as the family pledge style loan is fairly active and their guarantee would normally be limited to 20% of the purchase price.

I assume that working part time you may not be able to demonstrate a sufficient income on paper to satisfy the lender and would therefore suggest that your parent take out a loan against their property for say 20% of the purchase price and loan this to you.

You would then qualify for the loan in your own merits and their guarantee is not an issue.

FHOG would then become available to you on the basis that you satisfy the FHOG requirements in your State.

Now on the investment loan question most lenders will not load the interest rate or restrict the range of loan products availabel to you because you may rent the property out eventually so a residential loan would be the way to go. In saying this ensure that your Mortgage Broker structures it correctly for you so that you can benefit now and also in the future when it becomes an IP.

If in doubt or have a question feel free to email me.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

Hi Anita

This is one of the battles with X collaralised loans where the lender can dictate what you pay off when you sell or release a particular security.

There are 2 main issues here:

1) Your own home being tied up with the Ip’s though a X Collaralised structure and these would need to be worked through individually with Anz. Certainly not unsumountable but will take time to see what the assessed values they have on each property and whether your own home can be released.

Whilst you could sell one of the older IP’s (one where you will benefit from the halving CGT) and free up capital to purchase your new home you may find that the Bank require some of the realised profit to be paid of another loan or held as cash security.

2) This issue comes with your new home. If you raise funds to purchase the property and intend to rent it out the interest becomes a deductible expense. Structured correctly you could purchase this property utilising the security itself as well as additional borrowing against 1 or more of the other unencumbered titles. The rent can be used to ffset the interest payable as well as the Depreciation and Building Write off ect (if applicable)

When you decide to move into the property the interest would be no longer tax deductable. You will have 2 options:

A) To sell you current PPOR and then use the funds to repay any loan used to funds the Geraldton property.
Sell the property to an Trust and rent it out making the interest again deductable.

Again the issue of the X collateralised loans come into play as Anz may of course dictate where the funds go.

All in all not a major problem however just needs to be wortked through logically.

Unfortunately unless you sell your PPOR immediately and move into the new property the only way to secure the new home would be to borrow money (We will assume the Vendor will not offer a rent / buy or similar arrangement). What you need to achieve is that these funds are borrwed in the most tax advantaged way.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

Chris

Why not try

Ross Johnston PNA

Mack Accounting
PO Box 371
Pittsworth Qld 4356
Ph: 07 4693 3148
Fax: 07 4693 3149
Email: [email protected]

who posts here as trajjic. Always believe on supporting regular contributors.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

Certainly you will have a wider range of lending options if you can come up with a 5% deposit especially if you have a blemished CRAA.

A default with good explanation should be explained away to the mortgage insurer dependant on when it was and for how much.

Always a good idea to get rid of consumer debt first however as mentioned dependant on what your CRAA shows (Might be an idea to get hold of a copy of your Baycorp report) will determine how a 100% lender will consider the application.

Bit more information required to enable a more constructive response to be offered.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

Hi Steve

Firstly welcome to the forum and I hope you enjoy yoyr time here.

Maybe not be in Melbourne but most of my clients are inter state so would be happy to offer my assistance.

I am a long time property investor who has 1 or two IP’s to say the least and have been on the forum for around 7 years.

Hopefully you can get a reference or two if needed from a few of the other forum posters.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

Firstly Happy New year to everybody and especially the new members on the forum.

Certainly i agree that you need to start off with a personal and financial plan before you do anything.

Secondly you need to work out what structure you wish to set in place to buy your IP’s in i.e Trust. I have seen to many client go to Contract on the property and then ask us to establish the Trust which is of course then dated after the Contract ( A big NO NO).

Get your structure in place from Day 1 and the rest will fall into place. A good mortgage broker can analyse your borrowing capacity and suggest ways to save you money dependant on your long term and short term goals.

All in all hope everyone has a bumper 2007.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

Hi there

Before anyone can offer you financial advice they need to be a licensed financial planner.

One of the golden rules in the industry is “know your client” so I for one would need a lot more information prior to making any recommendation.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

Dave

As Terry has pointed out why not look at setting up a Loan on the property to 90% of the valuation. Sure there wil be a cost for mortgage insurance but as the purpose of the funds is for investment the premium becomes Tax deductible.

Then with the available funds draw down only what you need to cover the deposit on the first IP and acquisition costs and take out a stand alone loan secured upon this new investment security.

Repeat the process with your future purchases.

Prior to proceeding ensure that you have set up the entity in which you intend to invest in whether it be a Trust, Company, Partnership etc as a little time getting this right now could save you thousands when it comes to Tax time.

A good MB should be able to guide you through the maze.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.