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Do a search on this forum and others like it and you will find that it has been discussed many many times before.
I personally know of around 10 mortgage managers promoting the product and agree that there is a time and a place for it and this market maybe not be the one.
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Richard Taylor
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Licensed Financial Planner. Ph: 07 3720 1888
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Red
You can refinance upto 95% LVR so don’t let that be a barrier to starting investing.
Make sure that your existing loan is structured in such a manner that is effective by ulising a interest only loan and offset account.
Remember that when you refinance the LMI charged on the amount of money that is being used for investment becomes Tax deductible.
LMI is merely a cost of borrowing and is therefore deductible over the term of the loan or 5 years whichever is the lesser. It is proportional in the first year.
Each lender has a different LMI scale as well as both of the main LMI companies so it is extremely important that you shop around to ensure you have the most competitive deal.
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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.Richard Taylor | Australia's leading private lender
They are very old hat products.
They were available in the UK in the late 80’s along with 30 Year fixed rate products.
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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.Richard Taylor | Australia's leading private lender
And not bad for a maiden post.
Maybe a S & P plant.
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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.Richard Taylor | Australia's leading private lender
Hi Paul
No the lower the LVR the lower the LMI premium.
Also the LMI premiums maybe slightly higher for a interest only loan over a P & I loan.
In saying this each lender has a different LMI scale charge so a good MB will shop around and see what he can find for you.
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.Richard Taylor | Australia's leading private lender
Hi Paul
If you take out an interest only loan or a P & I loan for the purposes of investment the interest is tax deductible.
The ATO apply the purpose test for the funds and not the security on which the funds have raised.
Obviously with an P & I loan the debt reduces with each repayment and therefore the amount of interest you end up paying also reduces thus reducing your Tax deductability.
If the property is currently your PPOR but could end being an IP i would suggest an Interest only loan as otherwise you will be reducing some of the Tax deductible interest you can claim when the property becomes available for rent.
Your MB should be able to structure it correctly for you both now and with your changing circumstances in the future.
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.Richard Taylor | Australia's leading private lender
As Terry mentioned 12 months Caual employment is all you will need forget about 2 years.
Also remember a lodoc loan doesnt mean you can inflate your income all it means is that normal evidence is not required.
If you do not wish to decalre any form of income then a Nodoc loan is the way to go although you are normally limited to 80% LVR.
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.Richard Taylor | Australia's leading private lender
If you have an ABN relating to one entity many lenders will still provide you with lodoc financing in another entity even though the ABN for that entity has only been registered for a day or so.
Also don’t let anyone tell you that you need to pay a higher rate for a lodoc style loan. Most quality deals can be done at lower than standard variable rate.
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.Richard Taylor | Australia's leading private lender
Think you made the right move myabode.
I am not a great fan of our friend Maha even if he is my neighbour.
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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.Richard Taylor | Australia's leading private lender
He is correct and I should know they sold all off the properties we developed for a 8 year period.
Try a search on the forum here and you will read many posts about Mr Young and his organisation.
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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.Richard Taylor | Australia's leading private lender
You can sell your existing IP’s to your Trust but this will trigger both a Stamp Duty and CGT issue.
Think it is too late for existing properties.
As an employee you are unable to have your salary paid to a Trust.
Ensure that your Mortgage Broker has set up your loans correctly to ensure that future purchases in Trust are not happered by poor loan structuring.
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.Richard Taylor | Australia's leading private lender
If you are thinking about becoming a Buyer Agent or performing the servcices of such you may need to check the legislation in your particular State.
Most States require a BA or REA to be licensed and the penalties are harsh if this is not complied with.
Merry Xmas to all forumites.
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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.Richard Taylor | Australia's leading private lender
Understandable.
Your MB should point out to you all of the exit fees and early repayment penalties. Many lending institutions are also charging DEF on their suit of variable loan products when they are repaid early or lump sums repaid.
Make sure that the loans are not X collaralised and that have flexibilty as the lender will be required to give consent to any subdivision or partial sale of security.
Again you MB will be aware of this especially if he has experience in the development market himself.
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.Richard Taylor | Australia's leading private lender
A Nodoc loan requires no proof of income or does it require the borrower to insert a annual income figure on the application to show that he can service the loan.
In many cases there are no requirements to declare his Assets or Liabilities either.
A lodoc loan in most cases requires a figure to be shown on the application and the lender will take this figure as evidence of income. In some cases all that is required is a decalration confirming that the borrower can afford the monthly repayments of XYZ.
There are a view other slight variations between the 2 loans depending on the various lenders.
Hope this helps.
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.Richard Taylor | Australia's leading private lender
This all depends on what the use of the property is for and what your long term goals in respect to investing are.
If you are looking at a single loan which will be a PPOR and have no intensions to be purchasing an IP then the requirements for a lender would be totally different to a client who is looking at building up a long term property or investment portfolio.
Thankfully each client has different needs and requirments and that why i guess our job is so much fun. Wouldn’t life be boring and frusterating if everyone needs where the same and we all had to deal with the Big C.
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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.Richard Taylor | Australia's leading private lender
It might be late or it might be me but can i get you to elaborate more on your question as i am slightly confused as to what you are asking.
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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.Richard Taylor | Australia's leading private lender
Terry is right the traditional Lodoc loan was perceived to be more expensive than a full documentated loan but often the rates can be negotiated accordingly and many clients end up paying a lot less.
LMI is usually payable where the loan is > 60% LVR (although in saying this one ledner we deal with goes to 76% without LMI) and is either charged to the client or paid for by the lender and in some way factored into the deal. (DEF or exit penalty, higher interest rate etc etc).
If you are unable to produce figures for the current year but feel you can service a new loan you would be better off to either go for a NODOC loan or alternatively a Lodoc loan without LMI (usually 76%).
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.Richard Taylor | Australia's leading private lender
As Terry points out sometimes you may 0.10% extra with a LOC.
With a PPOR you might decide that you wish to rent the house out after all and want to try and obtain the maximum interest deduction. If the principal on the loan has been repaid then redrawing these funds down mean they will not be tax deductible.
If you merely take them out of the offset account then the interest is adjusted to reflect the gross loan balance and the total monthly amount is still tax deductible.
Other than a few slight variances the interest calculation is much the same.
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.Richard Taylor | Australia's leading private lender
James
In the old days you could probably get upto 18months worth for a trail for a new loan but given the churn period this has dropped and depends on whether the loan in:
1) Fixed / variable
2) Int only / p & I
3) lodoc / fully verified.Most of the trails i have purchased in the last 6/18 months have been at around 6-12 months of trail value from the date of settlement.
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.Richard Taylor | Australia's leading private lender
Thanks IG.
Cheques in the mail.
Wishing you both a merry xmas.
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.Richard Taylor | Australia's leading private lender
