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Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Rick
No hate too say you will be limited to claiming the interest on the $496,000.
Refinancing and borrowing additional funds will not be an acceptable purpose for claiming a Tax deduction on the increased interest.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Stu will depend on whether you are contracting or whether you are self employed working for a number of different employees.
At 80% lvr and assuming the former standard rates should apply.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Yes we are finding with the right property the valuation and purchase price are coming in at the same figure.
Many properties are over priced as they have the marketing fees in built to the price.
Lenders do go to 90% plus LMI and there is no reason why you should pay a higher rate or application fees / costs.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Jon,
You mentioned you have already paid LMI so when the current property becomes available for rent you will be able to claim a portion of the LMI as a deductible expense.
Paying down your current loan wont save you anything in regards to LMI so don't do if for that reason.
If the property is going to be a PPOR then utilise your own cash funds and if necessary look at alternative products where there is no LMI payable or reduced LMI due to a higher interest rate.
With the correct loan structure and depending on how much you have in savings you may well find out that you can avoid LMI and still borrow more than 80%.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Kali
As has already been stated you would certainly better off with a interest only loan linked to an offset account if you are intending to save for a PPOR.
On the basis that you can qualify for a standard residential loan and subject to the security value of the property you might be better off to look at refinancing the loan to a standard
residential lender and setting yourself up ready to go again when you need to.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Only one of the mortgage insurers will allow a a borrowed deposit > 90% (And they are very Post Code restrictive on this product) so i go back to my initial comment about how you are going to finance such a deal.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Hi JP
Good to have you on board.
Wow 1 out of 81 apartments in the block i am not sure that you will get much capital growth if you are competing against 80 other owners in the event that you need to sell the property.
Are you sure you are not paying a premium for a new property.
Often you are better off in buying something existing with a proven rental record or even better an existing tenant.
We are finding a lot of inner city Melbourne properties not coming upto purchase price when it comes to valuation.
There are a lots of alternative options where you can get good yield / an capital growth over time.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Assuming you hold a Credit License or an Authorised Representative of someone else who does you need to comply with the NCCP legislation.
You are required to provide the Buyer with a copy of your Credit Guide, Credit Propsal Disclosure and then have them sign the Preliminary Assessment you have prepared and ensure that you can justify the reasons why the loan is not unsuitable and how you got to that conclusion.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Jack
Darryl prepares all of mine and legislation is National.
Difference is the Call Option inside the Option Contract relates to the State where the security is located.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Probably have a slightly different view to the boys as my investment debt is less than 5% of the property values so needless to say the rents are extremely positive and more than enough to live forever and a day.
Capital Growth is important however assuming we see a general slow down in the overall property market for a period of years you need to ensure that your property has good ongoing cash flow to counter balance this.
My question to you would be with only 15K deposit how are you going to finance your next deal.
If you take away acquisition costs, legals etc there doesn't leave much.
Certainly you could consider a 100% blended loan but going to be limited to where you purchase.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Simon
Firstly welcome to the forum and I hope you enjoy your time with us.
As long as you are a PAYG employer and not a Director then there should not be any real issue.
If you are on a probationary period then this may cause issues with some lenders but all depends on whether what you do was aligned to your previous occupation.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Nathan, no in the main going to need 20% as LMI won't accept a TD as security.
The TD would be held as security so you wouldn't be able to use the funds during the period but of course when it was released 100% of the existing loan would be Tax deductible.
If this is not an option make sure you shop around as LMI premiums for FTB's do vary between the 2 insurers and from lender to lender.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Nathan
Couple of immediate suggestions.
You could look at borrowing 100% and using a Term Deposit as collateral security and that could help or alternatively going 100% fixed and offset account at the same time.
You are correct that you need to occupy the property for 12 months in order to qualify for the concession rate something that a lot of first home buyers forget.
In regards to your LMI premium this is considered a borrowing expense and is deductible over 5 years or the term of the loan once the property is available for rent.
It is proportional so assume you settled July 1 2013 and the property became available for rent July 1 2014 you could claim 4 / 5th's of the total premium charged being 1/5th each year for the 4 years.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Blake
I think you are getting slightly confused as the 2 are totally unrelated.
You don't require a Company to hold a ACL.
Secondly i think you are referring to the Company having a Corporate Trustee.
If so and you have considered all factors of the business then certainly no reason why you wouldn't get that route.
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Richard Taylor | Australia's leading private lender
I agree things seem to go from bad to worse.
Definitely get yourself urgent legal advise as your comments have outlined some real potential concerns.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Rus
No they will want information information on all of your own personal assets and liabilities. In norm where you own other property joint with your wife or other party they will allocate 50% of the rent (assuming it is an IP) and take 100% of the loan liability i.e PPOR repayment.
Hence the reason to ensure it is structured correctly with the right lender as otherwise your investing journey will come to a very quick end.
As for suburb information it depends on what you are trying to achieve from your acqusitions.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Ok Terry take your word for it although entirely convinced as Darryl is a pretty smart cookie.
Where is he when we need him to defend us Qlders.
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Richard Taylor | Australia's leading private lender
Newbeez I certainly wouldn't be relying on a website to tell me what documents you should be receiving from the Vendor.
Your Solicitor should be advising you on what is needed and reviewing them thoroughly before you sign them.
I assume you are joking about undertaking a sprinkler test as there are 101 more important areas that need checking before you get that far.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Rus
Firstly welcome to the forum and I hope you enjoy your time with us.
As Terry mentioned the normal recommended way is to take out a Line of Credit or equity loan against your existing securities and use these funds to as deposit and acquisition costs for the new investment property being purchased.
After a couple of years we revalue the investment properties and looking at taking the standalone loan back up to 80% of the increased value and use the funds to pay down the LOC enabling the funds to be re-used again for further deposits.
I purchased and still own 40 properties which i acquired over a decade to 2004 before i retired for the first time. 37 of these properties are fully paid off and the balance of the loan will be gone by mid next year so it can be done as per Steve's book however the market has changed and you probably need to adopt a slightly different gearing and repayment strategy.
As a Buyers Agent with representation in Qld, NSW and VIC we get asked regularly by clients how to structure their lending to enable them to purchase multiple properties.
I say to all of them with sufficient equity / cash resources and serviceability thru rental and personal income there is no reason why you cannot purchase a serious number of properties and live off rental income for the rest of your life.
Going forward however with no guarantee off capital growth you also need to focus on rental yield.
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Yours in Finance
Richard Taylor | Australia's leading private lender
