Forum Replies Created
A very good friend of mine had a nervous break down not so long ago. He disappeared without telling anyone. All we heard was the he was ok but not contactable from his family.
Anyway, when he reappeared 8 months later, it turns out that he went to a ‘farm’ somewhere to recouperate and was advised to declare bankruptcy (poor advice in my opinion) to avoid the stress of his debts. The break down had nothing to do with the debts.
If he had asked his friends for help, a few of us would have happily paid all his debts to be repaid at a later time when he was better. He told me he was too embarrassed to ask us for help or tell us what was going through his mind.
It is quite sad that a temporary mental disease can adversely impact a persons life for so long. He is finding it tough to get anything done now. He can’t sign contracts, can’t travel, can’t work in various fields, and so on.
Surely there is a better way to sort out temporary set-backs without placing flashing lights on someone’s name (who has a legitimate reason) with the likes of Baycorp!!!
Robert Bou-Hamdan
Mortgage AdviserI agree Kay.
I met someone from this forum a while ago (shall remain nameless) who did the most amazing thing. They were on the verge of bankruptcy and somehow negotiated their way into a single payment to all creditors which, if I remember correctly, was only about 20% of all monies owing. The creditors accepted this as full payment and there was no Bankruptcy, Part 10 proceedings or other credit defaults which followed.
I still don’t know how that person pulled it off but I know they will be getting a call from me if I ever get in trouble!!!
Robert Bou-Hamdan
Mortgage AdviserThank you for your kind assistance brahms.
Robert Bou-Hamdan
Mortgage AdviserOriginally posted by kay henry:Nicely said, brahms.
Would you kindly explain it to me as the ‘bridge’ comment has gone over my head???
Robert Bou-Hamdan
Mortgage AdviserJust to make sure we are on the same page here, are you guys suggesting the following is legitimate?
Assume 7% interest on all loans and no fees…
Loan 1
$200,000 PPOR P&I (Non-Deductible)
$1,330.60 per monthLoan 2
$200,000 IP Interest Only
$1,166.67 per monthLoan 3
$200,000 LOC Limit Interest Only
$6.81 Month 1 (After paying Loan 2 monthly payment
$13.61 Month 2 ” “
$20.42 Month 3 ” “
…and so on.If so, what is to stop you doing the following?
Loan 4
$200,000 LOC Limit Interest Only
$0.04 Month 1 (After paying Loan 3 monthly payment
$00.08 Month 2 ” “
$00.12 Month 3 ” “
…and so on.And how about taking Loan 5, 6 and 7 if you don’t want to pay 4 cents extra per month on your IP????
If this is legitimate, this means all your income and rental income will be directed into Loan 1 which would mean it is paid off in a couple of years. All this BEFORE any tax deductions are taken into consideration.
The sole purpose of this structure is to increase deductible debt to minimise non-deductible debt.
Robert Bou-Hamdan
Mortgage AdviserAnd how would you mitigate?
Robert Bou-Hamdan
Mortgage AdviserI think rent is dead money if those paying it do not have other investments.
Robert Bou-Hamdan
Mortgage AdviserTerry, the scenario you have outlined here is paying one loan with a second loan and paying the interest on the second loan with cash. There is no point!
You are incurring additional interest to pay interest in order to benefit from increasing deductions. Disregarding Hart’s case, the ATO has provided advice regarding setting up a structure with the sole purpose of increasing your deductions and enabling you to pay off non-deductible debt quicker. I consider it illegal whether the loans are with the same lender or not and I believe the ATO also considers this illegal.
I would be very interested in hearing some Accountant opinions as to this structure.
Robert Bou-Hamdan
Mortgage Adviserbrahms, I am asking if ‘YOU’ would lend.
Robert Bou-Hamdan
Mortgage AdviserANZ do not give ratings to companies. A small and relatively new company is only as strong as the Directors behind it. You need at least two years full company tax returns showing healthy profits to be able to borrow solely on the company figures.
I am not arguing with you. I am just trying to set you straight as to why you are being declined or being offered expensive finance. Just because I am saying something you do not want to hear or accept does not mean I am arguing with you.
Another tip: Try providing the lender what they ask for instead of “arguing black and blue” with them. It really gets you nowhere.
Robert Bou-Hamdan
Mortgage AdviserGreg, that is a really good idea!!! I suppose this should also extend to mortgage brokers as well. The lenders are against it because one of the ways they attract new business is by paying mortgage brokers more. For obvious reasons, mortgage brokers are also against it.
Robert Bou-Hamdan
Mortgage Advisergf,
You are new to this forum and you are definately picking the wrong person to pick a fight with so I will give you the benefit of the doubt. I suggest you take a breath and relax before posting absolute crap directed at me that is without merit.
I do not give any legal advice or any other kind of advice for that matter. The information in this forum is just general discussion.
Regarding a ‘time is of the essence’ clause, there are various different wordings that can apply. Some such wordings do not require providing reasonable notice of anything. Also, reasonable notice would only apply if there is an ongoing relationship where an applicable ‘time is of the essence’ clause is contained in the contract but never enforced and one party decides to invoke the clause after these ongoing dealings outside the contract.
I am familiar with LEGIONE v. HATELEY (1983) 152 CLR 406
“The respondent lost her interest in the land because she did not pay the residue of the price at the time she had promised, though she had agreed that time was of the essence of her contract. There is no equitable jurisdiction to relieve against the consequences of failure to pay the residue of the purchase price by the due date when the parties have agreed that the time of payment is of the essence of their contract (cf. per Lord Wilberforce in Shiloh Spinners Ltd. v. Harding (1973) AC 691, at p 723 ). The purchaser, having lost her right to specific performance, has lost the benefit of the expenditure which she outlaid in putting a dwelling on the land. The appellants have obtained the benefit of that expenditure, but that circumstance does not destroy or sterilize the stipulation that time should be of the essence of the contract.”
Shoooooooooo
Robert Bou-Hamdan
Mortgage Advisergf, I don’t think you realise that it takes more than 18 months to demonstrate to anyone considering lending you any unsecured funds that you are eligible after just recently coming out of bankruptcy.
Most first tier lenders will not lend to anyone who has been bankrupt in the last seven years and sometimes will not lend to them if they have ever been bankrupt. It is a very serious blemish.
Robert Bou-Hamdan
Mortgage AdviserThank you. The R threw me off.
Robert Bou-Hamdan
Mortgage AdviserWhat does CRIN stand for???????
Robert Bou-Hamdan
Mortgage AdviserThere is always a place for those using other people’s money or 100% finance. I would personally be totally satisfied helping my kids get a start in life by helping them with a deposit and costs of purchasing their own home and seeing them make the repayments themselves. After all, why watch them pay rent instead?
I hear where you are coming from although, due to my high risk profile, I do not see much use for savings. I consider it ‘lazy’ money.
Robert Bou-Hamdan
Mortgage AdviserMarketing is marketing. It will always be there.
Regarding borrowing, there is ‘smart’ debt and there is ‘bad’ debt. There is nothing wrong with borrowing to the maximum for ‘smart’ debt in my opinion.
Using equity is just one tool that enables those seeking further investment to achieve their goal sooner.
Robert Bou-Hamdan
Mortgage AdviserBanks are now required to take LMI on any Low Doc over 60% LVR. You can find many non-bank lenders who do not charge LMI. Some of them have unusual maximum LVRs like 76% before they charge you LMI. I believe a few even go to 90% LVR with no LMI but you pay for it interest. Personally, I would prefer to pay the one-off LMI charge than get ripped off in interest.
Robert Bou-Hamdan
Mortgage AdviserTo the contrary, posting links does not annoy me at all. Posting the same negative rubbish over and over and starting similar threads over and over to support your cause is what annoys me.
Anyway, just so you know, I have decided to stay out of this economic debate. It has been done to death and seems to just move in circles. I will leave it to you.
Have fun David.
Robert Bou-Hamdan
Mortgage AdviserI am confused. You say “We buy properties in all conditions. Can offer Immediate Cash Settlements, No Real Estate Agents Required” but you are having touble with valuations and finance.
A property is only as valuable as what the next person is willing to pay. Excluding ‘advantageous purchases’, the price you negotiate for a property is pretty much what it is worth. Most valuers are of the opinion that if it was worth more, someone would have paid more for it.
Regarding the heading of this thread, ‘available equity’ comes from a property you already own. You do not have any available equity in a property you are buying.
Do you not have another property you can use to help with the deposit and closing costs?
Robert Bou-Hamdan
Mortgage Adviser
