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Prady, I think you should make an appointment with a mortgage adviser / broker and discuss your personal situation in depth so you can absorb the knowledge pretty quickly. There is a lot of information to take in and with so many different responses coming, I think it will only confuse you more than anything.
If you are in Melbourne, give Steve a call or email him directly. It will save you a lot of time.
The Mortgage Adviser
http://www.themortgageadviser.com.au
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Essential LinksPrior to legal action, I would write to the neighbour asking them if it is a financial concern that is delaying them. If it is, I would offer to pay for the fence as long as they agreed, in writing, to repay their portion at a rate affordable to them. They may be just embarrassed to tell you they cannot afford it.
If they are just unfavourable neighbours, I would pull the fence down and lay naked (a VERY scary site) in my backyard all day until they paid their half of the fence.
Legal action is a waste of everyone’s time and money.
The Mortgage Adviser
http://www.themortgageadviser.com.au
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Essential LinksI won’t advise you what to do as I do not know your personal situation. Renting can be better than living in your own home sometimes if you buy an investment property instead. There are a lot of options.
The difference in LMI in terms of dollars will be around 3 or 4 thousand dollars on a 350k home. It increases exponentially. It could be more or less depending on the lender and whether you actually borrow 97% or only borrow 95% and then capitalise (add to the loan) the mortgage insurance up to 97%.
Either way, you will need to come up with some additional funds for mortgage insurance which could be as high as 3.5% of the loan amount.
The Mortgage Adviser
http://www.themortgageadviser.com.au
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Essential LinksIt can be very daunting going through it alone. That is also why I suggested a mortgage adviser in the other thread. If they are there, willing and able to help at no cost to you, you could just meet with them and learn.
It is very hard to learn from books in Aus as things change very quickly and by the time a book comes out, many things have changed. Also, on forums, it is difficult to get complete responses with providing all the details. Much of the information provided is very general.
The Mortgage Adviser
http://www.themortgageadviser.com.au
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Essential LinksSurrey, I think you need to downgrade that figure to 3.50% or less in Sydney. 5% gross is considered an amazing return on most Sydney investment property.
The Mortgage Adviser
http://www.themortgageadviser.com.au
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Essential LinksHey dmichie, did you write to the media about your negative outlook? I just saw a news update where the media is suggesting interest will increase 1.50% by the end of the year. I personally don’t see it but it fits with your ideas about our economy.
The Mortgage Adviser
http://www.themortgageadviser.com.au
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Essential Links95% and 97% loans are the same rate as 80% or lower loans. The main difference is the mortgage insurance you would have to pay. This article might help…
The Mortgage Adviser
http://www.themortgageadviser.com.au
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Essential LinksHey Steve,
I was about to post this as well but the stupid link in my email was dead. It is a good report.
The Mortgage Adviser
http://www.themortgageadviser.com.au
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Essential Links1. 6 years exemption from when you move out as long as you do not move into another PPOR. You do not have to move back in before selling.
2. Renovations can be depreciated while it is rented. They will not be if you move back in.
3. Rent is included in your taxable income.
4. If you lived in the QLD property after leaving the other property, the 6 year exemption applies to the QLD property and you have lost it on the other property.
It seems to me that you lost the CGT exemption on your first home when you moved into the QLD home. I don’t see how you can still have the first one as your PPOR.
Don’t forget, I am NOT an Accountant. Please confirm the above with a professional.
The Mortgage Adviser
http://www.themortgageadviser.com.au
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Essential LinksThe best time to buy is NOW.
The Mortgage Adviser
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Essential LinksOriginally posted by Ibuycashflow:It works in times of high capital growth and rental growth as well. You still need a large portfolio but this can be leveraged.
Does this comment not support exactly what I have been saying about a strong equity position?
The strategy is also used by developers, home renovators and even share traders (as I doubt they rely on dividends)This is where I would support such a ‘strategy’ as funds are being used for investment purposes.
Your scenario of Mum and Dad with an over valued, negatively geared portfolio, with no job, don’t know how to use a paintbrush, and no other sources of income, during times of negative growth, is a worst case scenario.How do they live? I agree Rob, in such a scenario they couldn’t. So being unable to use the strategy of “living off equity” could you please tell us, how would they live?
It seems you think that they should use this ‘strategy’ to live. As a mortgage adviser, I can assure you that the above individual will not be able to get a loan unless they use no doc or lie. To be negatively geared, that would mean that they are either out of or borderline for the no doc loans. That leaves lying.
How would they live??? They can lie to get a loan and ‘live off equity’ and risk all their assets or SELL a property, reduce their levels of debt and access the cash. They would certainly need to invest in income producing assets if they only had the one property.
The question put to you had changed to tougher times and I found your “I am good and pick investments that will continue to grow at sustainable levels” response as inadequate.Regarding this comment. Good to see you don’t get personal Rob but you know what they say about people in glass houses. Your arguments against living off equity have been backed up by inaccurate calculations and by placing unrealistic constraints on an example to prove a point. Not very convincing.
I just can’t see how saying a comment is ‘inadequate’ in my own opinion is some sort of personal attack. You are way too sensitive!
My calculations are very accurate as they were simplified for ease of reading. Regarding the constraints, the question put was about ‘living off equity’ for the 100th time. It is not ‘investing off equity’ which you keep speaking about. There is a huge difference.
There’s plenty of info here for everyone to read and make their own minds up. I know you will want the last say, so I’m timing out of this thread and will let you have it.As for this comment about me having the last say, it is a very common tactic for poor debaters to use to try and prove a point or win some browny points. Of course I will respond when you provide inaccurate information as I am certain you will respond yet again which I would welcome.
That is the nature of discussing or debating a topic. Just because you don’t like what the other person is saying does not mean you should spit the dummy and run.
I look forward to your further responses Jeff.
The Mortgage Adviser
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Essential LinksYes, but you would have had someone take care of all the issues you are facing without stressing yourself about standard forms. You might have also obtained a better deal.
The Mortgage Adviser
http://www.themortgageadviser.com.au
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Essential LinksMaking your payments on time will not cause you any problems. If you have other accounts with them and you do not pay, they can always access those funds held in other accounts. No wording will help you but you can always change your account to another bank. Then they will only be able to access the one you sign an authority for.
The Mortgage Adviser
http://www.themortgageadviser.com.au
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Essential LinksOriginally posted by Dazzling:No it’s not difficult.
So what does this refer to Dazz???
The Mortgage Adviser
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Essential LinksMost lenders will change a loan to interest only or vice versa following a phone call. May I ask which lender it is trying to charge you $4000 and requesting documentation?
The Mortgage Adviser
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Essential LinksA second mortgage is merely what the name suggests. A second mortgage is taken over your property. You will find it extremely difficult getting a second mortgage over 95%. In any case, if you can service, you can get 97%, 100% and even 106% finance on a first mortgage.
Downside of a second is the high cost and not many lenders will do it.
Interest rate changes should be considered with any investment. If they go up, you do your numbers. If you are still satisfied with the return, it should not stop you.
The Mortgage Adviser
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Essential LinksI would say NO unless you want to pay mega-interest. Also, things seem way too tight. Just regarding the Trust, it needs to be set up BEFORE a contract is signed or Stamp Duty will apply again.
The Mortgage Adviser
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Essential LinksThey do not get the benefit of the doubt in Indo. It is an inquisitorial system whereby you are presumed guilty until you prove your innocence. Just because we use a different system does not make theirs wrong. She was clearly poorly represented in my opinion and damaged her own chances by playing it out in the media and did not prove her innocence beyond any reasonable doubt. This would have never happened in an Australian Court.
Maybe she will take up the offer of propert representation this time around and get off on appeal.
The Mortgage Adviser
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Essential LinksIt is less than $100 in all States and is the government fee for lenders to register a mortgage on your property. You also pay a fee to release a mortgage.
The Mortgage Adviser
http://www.themortgageadviser.com.au
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Essential LinksMore space in the PM inbox folder would be good. 20 is not enough.
The Mortgage Adviser
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Essential Links
