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Megan, I totally disagree that higher value properties grow quicker than lower value properties. There is more demand at the lower end!
TMA
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First Home Buyer WebsiteFHOG is not guaranteed to be there forever. http://www.fhog.info. Other discounts and concessions are certainly not likely to be around forever.
I would use it while it is available.
TMA
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First Home Buyer WebsiteOr there is the ‘ILLEGAL’ alternative….
Charge them full rent and then kick-back the ‘CASH’ difference each week.
I personally would not charge family anything if I could afford it.
TMA
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First Home Buyer WebsiteC2, I can answer number 3 quickly for you…
Ask your lender if they will separate securities. If they will you will not need to refinance. If they won’t, you can refinance within the same lender or find another lender. You need to split your loans so the LVR on each property is at acceptable levels to be able to stand alone. It is not a difficult task.
Example of cross-collateralisation…
4 x properties worth 250k each
1 x loan at 800kExample of stand alone properties…
4 x properties worth 250k each
4 x loans at 200k eachTMA
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First Home Buyer WebsiteMore information about the First Home Owner grant is available at http://www.fhog.info.
REBA is only applicable in WA.
Being self-employed will cause you some difficulty getting finance unless you have 20% or more deposit. You will need 2 years full financials showing sufficient income to service the level of debt you will be applying for.
You cannot apply for the FHOG and use rental income to service a debt on an application as it is assumed you will live in the property and have no rental income.
By the way, you only have to live in the property for 6 months starting in the first 12 months. That means you can move in on day 1 or day 365 as long as you stay there for 6 consecutive months.
No-one can tell you how long the FHOG will be available but in your situation, it looks like you will need rental income to help with servicing. I would be looking towards investment properties first.
Alternatively, if your parents could help with equity in their home, it would offer a lot more options and make things a lot easier.
TMA
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First Home Buyer WebsiteBenny,
The properties in 11 are in addition to the unencumbered property in 8 and the negative geared property in 4. That is how I read it. The 50k figure used throws me.
TMA
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First Home Buyer WebsiteThe theory sounds ok but I would be looking closely at the managers of the investment. If they are hopeless managers, it does not matter if you put in $1 or $100,000. You can still lose the lot.
TMA
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First Home Buyer WebsiteOriginally posted by bf:1. I have read the posts here and realise that I should have bought the house on a IO loan with an offset account. Is it possible to change it in 2006 without too much penalty?
The ING product is not the best option to change to Interest Only. You might find it better changing to another product. You should not face much penalty unless LMI applies again. That will depend on amount owing and property valuation at the time you make the change.
2. The house was valued @480k but the bank ING agreed only to lend money based on the purchase price $430k (I did not know Bankwest lending based on valuation[evil5]). I expect that the value would go up to $500k next year (hopefully). Could we still borrow up to 95%? In this case up to $475k? Because the debt is $400k thus leaving us $75k money to do the renovation?BankWest is not the only one who bases lending on valuation instead of purchase price. I must assume you went direct instead of through a good broker. All lenders I know of will base the LVR on valuation but some will only lend based on contract price if it is a short period between contract date and settlement.
There are not that many lenders that will do 95% LVR on a refinance although they are out there. If you took this option, you will be up for another huge LMI bill so don’t expect to have access to the full 75k.
3. Assume that the above is possible and we complete the renovation and getting $400/week in rent. If we want to purchase some IPs, I guess it is better off on my name only because the tax benefit is higher. How much would I be able to borrow? What is the best structure? IO only? I guess an offset account is not important because I will not have extra money to pay into the IPs. It is apparently better to put all the extra money into PPOR loan.How much you can borrow depends on a lot more information. Living expenses and other liabilities and expenses must be considered. The best structure will also depend on your personal requirements. I believe an interest only loan with offset account is the most flexible and best structure for the majority of situations.
When you have non-deductible debt, I believe an offset account becomes more important. You would attach the offset to your non-deductible debt and all investment loans would be interest only.
4. What are the tax implications? The interest on the further $75k would be tax deductible.Any money used for investment purposes is tax deductible regardless of which property you borrow against. I don’t know what the implications will be of renting out rooms in your PPOR as I have never seen a house be both a PPOR and an IP. This would make me assume that the money used to renovate would not be deductible. You need an accountant here.
5. The land we bought is already divided into two lots and titled residential B. Would development of the land more profitable? Would finance be a problem considering my personal situation?There is not enough information. Regarding the ‘two lots’, I don’t think building below your existing house would take advantage of the opportunity to have two seperate titles unless you can get the new rooms strata titled. Again, I don’t like your chances.
6. Would it be difficult to get the LMI partly refunded?It is difficult as it is optional whether LMI is refunded. If you do it within a year, you are a good chance. A refund will only be available if you sell and repay the debt, not if you increase the loan.
Find a good broker and good luck.
TMA
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First Home Buyer WebsiteSPAM!!!!!
That site is for England & Wales.
TMA
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First Home Buyer WebsiteHi Pete,
I don’t know that much about it to really know which area I want to be in. Like anything new, I like to start at the bottom and look at all areas. I was thinking retail domestic and international travel to start with. Hopefully I will learn different areas from there.
TMA
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First Home Buyer WebsiteAnother ‘authorised representative’ of Meridian Financial Pty Ltd. Do these guys just rent out their financial services license to anyone?
TMA
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First Home Buyer WebsiteI am not a solicitor but I am amazed that your concerns were financial when visiting your dying father. If the will is challenged and you win (very likely), his current wife will get most of it anyway as I am assuming all children are now mature age.
In my opinion, the current home will not be taken away from the current wife so I would forget about that. The 80k might be split between the ‘blood’ children and current wife. At best, you are looking at 40k in my opinion. If you are suicidal over 40k, I think you have bigger problems to worry about than challenging a will.
Forget the solicitor and see a psychiatrist first.
TMA
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First Home Buyer WebsiteI am still wondering as to why you do not use an offset account to reduce your interest expense and improve cashflow while not losing any potential deductibility as and when you need it. Each to their own I guess.
TMA
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First Home Buyer WebsiteDo you live in a PPOR with money owing?
If so, what is the interest rate on these funds?
TMA
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First Home Buyer WebsiteWhy do you not make a formal complaint in writing. The only reason he is so bad is because everyone else is too weak (not just your boss) to stop him!
TMA
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First Home Buyer WebsiteI don’t think of it that deeply. The rule merely states that if you can only have one PPOR. If you are currently renting after moving out of a PPOR, you can still call that property a PPOR for 6 years. If you move into a new home that you own, that is your new PPOR and the 6 years will apply to it if you move out to rent again.
TMA
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First Home Buyer WebsitePeople often do not realise that the promise to pay the contract price is not consideration. That is ‘acceptance’ of the ‘offer’. Consideration must have nominal value.
TMA
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First Home Buyer WebsiteYeah, it is a 6 year CGT exemption if you don’t move into another property you own. You have to live in it for 6 months though to not lose the FHOG entitlements.
TMA
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First Home Buyer WebsiteWhat is the company charge of $3,500 that keeps popping up every year on these properties you are talking about?
TMA
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First Home Buyer WebsiteBeing to soft or too generous just does not work in this day and age. Too many people are way too quick to take advantage and will not return the favour when it is needed. I also learnt this the hard way!
TMA
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First Home Buyer Website
