Forum Replies Created
Hi Chetnik
Yes sure but that assumes you buy your next IP before the PPOR.
If you do it the way they suggested you will either incur LMI or have to put cash in on the next IP deal which doesn't make any financial sense.
Buying your PPOR and structuring the way i suggest means you use none of your own funds for the next IP at all.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Chetnik
Would be very unlike a lender to tell you can get a better deal elsewhere or structure the loan in a manner more favourable to you than them.
I have to query why they would suggest what the have.
When we work with forum clients in situations like this we try and work backwards.
Let us assume that you intend to buy an IP for 500K.
To make it an 80% lvr you are going to need 100K deposit and say 20k to cover your acquisition costs etc.
You would look to establish the 120k by way of an interest only sub loan secured against your PPOR.
The initial PPOR main loan would be linked to a 100% offset account and the 120K sub loan would sit there until you needed to draw upon it for the IP.
At the sort of total loan amount you are looking at you should be able to shop around for not only a good rate but flexible terms and costs.
Did a similar size loan for a forum client a week and must admit was pleasantly surprised the deal we could negotiate.
Hope this helps.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I assure you a mobile lender with any Bank would not be earning anything like that unless they are setting records week in week out.
I have been in the industry over 22 year both in the UK and in Oz so have built up a sizeable trail book but as Jamie mentioned you aren't going to do that in the first few years.
Many lenders do not pay trail in year 1 anyway so don't expect that to grow overnight.
I am looking to take additional brokers on in Sydney, Melbourne & Perth this year but certainly won't be paying them a base salary.
They will also be expected to source their own business although we will process their loans and offer them advice and assistance on structuring and some of the technical parts of loan planning.
If is something you are considering expect to start slowly and build from there.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Benny
It is a good point you make but couple of considerations;
1) Westpac will not allow it some lenders will but they are not one of them.
2) Seller may have his loans crossed collateralised or owe more than 80% or may need more than this to move onto the next deal.
Doable but needs a rethink on strategy.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi KSJA
Firstly welcome to the forum and i hope you enjoy your time with us.
Fear not no question is a silly question and this is what the forum is all about learning from others.
Anyway here goes:
1) Am I right to say the amount of interest-only repayment are calculated based on the amount I owe the bank, so any equity growth will be irrelevant to repayment amount?
Yes that is exactly right. Your repayments will only increase on the basis you increase your borrowing. Leave it as it is and your repayments will be constant (subject to interest rates)
2) In order to live off rental income, does it means that I have to wait till either the interest goes down or wait till I rise the rent?
Yes i hate to say so.
3) I thought interest-only mortgage comes with a 5 years term, is this when I start paying the principle on the 6th year then I will be able to start "living off" rental income because my interest repayment will go down as a result of reduced amount owing to the bank?
No you can extend your interest only period once the 5 years expires subject to your lenders criteria. Remember in Year 6 your repayments will increase not decrease as you are now starting to pay down the loan and the increased amount will be the principal reduction.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
We submit for our clients a full offer including purchase price, deposit, settlement date and all terms and conditions etc.
Never leave your offer on the table too long.
Also why do you want to avoid LMI ?
It is an opportunity cost and gives you flexibility for the next IP.
Your Broker should be advising you on these matters.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
And there are a couple of others also.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
All of this is good advice assuming that when you demolish the property you have sufficient cash reserves as your lender will only lend against land value.
If your initial loan was based on the purchase price / valuation then you may be in for a financial shock.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Jay
Yes for all if our UK clients we do then as second homes as it a skip and a job out of Heathrow.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Florida Mortgage Corporation have been offering Non Resident loans since the 90's and never really stopped over the GFC period.
We have done dozens of deals with them for a lot of our UK clients.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Jotham
Firstly welcome to the forum.
You mention you are wanting to spend circa 450k yet want something near the CBD.
My deduction would you are seeking a unit and to be honest if you were a client of ours I would talk you out it.
There are some excellent inner city suburbs ( although I am slightly biased as nearly all of my properties are in Brisbane) but just be careful that you are not following the herd and buying another unit with high Body Corporate fees and dwindling net returns.
You are more welcome to give me a buzz in the office during the week and I can talk to you more.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Of course another thing you have to remember is that your flight costs, hotels, meals bike hire etc for flying up to visit the properties is not Tax Deductible.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Personally I wound not self manage although I have a few more properties to think about.
Guess I can sort of understand why you would look to do it from a cost perspective but if you intend to be a serious investor the costs are small fry.
Nothing to stop you using a PM to merely find the Tenant for you and you take over the day to day management.
Just make sure you are well versed on the relevant State legislation.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
To be honest for the right Commercial security not much has changed as far as Rates in the Com sphere since the last post.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Must admit i am searching why the Broker would ever put the deal to Westpac in the first place but there may have been method in the madness.
Anyway think it is very unlikely they will change their decision so matter of starting again.
No lender cares about your individual business as you are merely a number to them.
In saying this some lenders are more sympathetic to deal with and you can access their credit departments and speak to the assessor.
Would never put Westpac in that category.
2 weeks for a 95% lvr where you would need to re-order the valuation is going to be pushing it.
Good luck.
Cheers
Youirs in Finance
Richard Taylor | Australia's leading private lender
Hi Chris
Welcome to the forum and I hope you enjoy your time with us.
All i can comment on with accuracy is the level of enquiries both on our Finance side and Buyers Agency.
In both cases we have received more enquiries from both new and existing clients in the first 3 weeks of 2014 than at any previous 3 week period in the last 2 years.
Really seems to be a level of acceptance in the market place that interest rates will stay low for the mid term and the economy is turning for the better.
Certainly valuations are reflecting this and the comments from the large valuation firms nationally is encouraging.
Brisbane for one is go go go.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Ask your Accountant if 2 x sworn letterhead valuations from Real Estate Agents would be acceptable.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Ginger
Why not try someone like Depreciator www.depreciator.com.au.
Just come off the phone from ordering one for a forum member.
They are very Professional and excellent to deal with.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Gayle
Hate to say hear it all day long from other clients.
Stick with who you have in your corner. Might be old an grey but straight as a die and I don't drive a bus lol.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
For me Alderley all day long.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
