Forum Replies Created
I think you are telling a fib David. You are looking for a house with four bedrooms on the North Shore are you not?
Robert Bou-Hamdan
Mortgage AdviserI don’t need a fork but would love some PROOF with it.
Robert Bou-Hamdan
Mortgage AdviserSettlement Agents are predominantly a WA thing. I would be going to one before signing anything. They give some pretty good tips.
Regarding your loan, I would seek a pre-approval BEFORE signing anything to do with property. Also discuss the location you are looking to purchase in and the property type. Some postcodes are restricted as well as some property types.
Walk into the deal knowing you have the support of a settlement agent, a mortgage broker and a pre-approval from a lender. This will empower you to negotiate a better deal in many cases.
Robert Bou-Hamdan
Mortgage AdviserYou can purchase a property subject to DA (Development Approval) in case it is never forthcoming. This allows you to walk away.
Robert Bou-Hamdan
Mortgage AdviserOriginally posted by The Mortgage Adviser:dmichie, is your name David from the North Shore?
Robert Bou-Hamdan
Mortgage AdviserRobert Bou-Hamdan
Mortgage AdviserOriginally posted by Salubrious:See you sooner rather than later Robbo…..
Is this some kind of veiled threat? Please let me know so I can quake in my boots.
Salubrious, professionals do not make comments regarding an achievement unless they can back it up. This is not considered professional at all.
Regarding you only willing to prove your claim by meeting in person to show me some loan documents, this is ludicrous. There are much easier and less time consuming ways to do this as much as I am happy to meet with anyone for lunch or whatever. Also, don’t forget to get a Privacy Act form signed by your client to show me the documents.
I know that no-one here needs to prove anything to anyone else, but when you spit out an unqualified claim like yours when other professionals are providing factual responses, you must expect to be challenged. If you are in fact telling the truth, I will be the first to dig into some humble pie.
Robert Bou-Hamdan
Mortgage AdviserSince when did East Redfern become a suburb? That reminds me of the old days when residents called their suburb Bondi Heights to try and give it some exclusivity. I always asked them – “Oh, do you live on the steep hills of Bondi?”. They never liked this question.
Robert Bou-Hamdan
Mortgage AdviserOf course I do not believe things go up forever in an economy. There are way too many variables and external influences. I blame this on how people vote. Whenever the Government does something that is not totally favourable, everyone votes for the other guy. It may be a much needed change but the general public respond on an extremely micro-economic level.
Imagine if a large corporation had this problem??? If Australia was run like a corporation without so many changes in Government, we may see continued growth. Many companies make a profit year in and year out without ever going backwards. The amount of profit they make may vary with various conditions but excellent management always sees them in the black. There is no reason why this cannot happen within a country.
dmichie, is your name David from the North Shore?
Robert Bou-Hamdan
Mortgage AdviserI don’t consider it insulting each other. I consider it heated debate. I rather enjoy it. I have no problem doing business with anyone who has an opposing view to mine. We would get nowhere if everyone thought the same way.
Regarding my passing interest in seeing the property boom continue, it is non-existent. I really don’t care personally what happens with property as I am getting out of property and you know I am getting out of mortgage broking and restricting myself to advising. The boom you mentioned also finished a while ago.
I just don’t believe anything is going to burst and do not share such a negative economic opinion as you do.
Robert Bou-Hamdan
Mortgage AdviserHave you ever thought that Saturday morning auctions may be a huge contributor to the problem? In the Eastern Suburbs of Sydney, most auctions are held during the week in the evening.
Are you going to tell us the area where properties are not being bid on at auction?
Robert Bou-Hamdan
Mortgage AdviserThe idea behind interest only and using offset accounts to park anything above the interest expense is mainly to provide flexibility. The effect will be exactly the same as if you were paying principal and interest including the taxation benefits if you do not spend the money sitting in the offset accounts. You must ensure not to mix up investment and personal expenses in the offset account though.
The biggest benefit is when it comes time to buy your next investment property – you will have a lot more cash available for deposits and expenses without needing to ask for a loan increase or other change on every loan. If you use the money from these investment loan offset accounts, it will still all be deductible.
Another benefit is if you live in your own home. Using an offset account instead of paying off the home means that you can maximise your deductions if you move out later.
Remember, at any time you can place all funds from the offset into the loan to pay it off.
It is all about flexibility and maximising returns.
Robert Bou-Hamdan
Mortgage AdviserAnd things become much clearer. Obviously your opinions are biased and your comments are either a conscious or sub-conscious attempt at getting the dollar to come down. That must be the furthest from impartial commentary I have ever seen.
What software do you develop? I may be interested as I do a lot with computers.
Robert Bou-Hamdan
Mortgage AdviserHey Richard, I did a loan for a mate with a major lender at 3% per annum and they only borrowed $100,000. I think I can get 2.5% if they borrow more. The lender said they were happy to make a loss as long as my mate was happy. They said that they would sort out the shareholders who had to wear the loss so it was not a problem.
Robert Bou-Hamdan
Mortgage AdviserHey dmichie,
I hope you don’t mind being asked, but what do you do for a living? Are you qualified in economics or work in a related field.
Don’t worry if you don’t because I don’t. I am just interested in knowing your background.
Robert Bou-Hamdan
Mortgage AdviserOriginally posted by dmichie:Quote:Its certainly affected the investor market, but all of the places I saw today were owner-occupied houses.So lets base our medium to long-term investment decisions based on 3 failed auctions in an area that has not been identified.
I bet there are other reasons why demand has dropped off at the auctions you attended this morning. One may be that everyone went out last night and did not get up in time. Why would you run an auction on a Saturday morning anyway? It is a receipe for disaster and the sellers were provided with poor advice in my opinion.
Robert Bou-Hamdan
Mortgage AdviserThe Macquarie Fields comment also reminds me of Campbelltown which has the highest crime rate in Sydney and a huge housing commission population. The property prices in this area went up exponentially in recent years mainly as a result of the M5 tollway being completed.
For every negative feature, there is usually a positive to be found.
Robert Bou-Hamdan
Mortgage AdviserBecause nearly everyone else is!
Robert Bou-Hamdan
Mortgage AdviserOriginally posted by dmichie:Hmmm … well I find it fascinating that a mortgage adviser is “getting out of all property investments”. Have you told your clients this, especially the ones borrowing 100% for a 50sqm apartment?
I am also getting out of mortgage broking and my clients know this. I believe you miss the point of mortgage advising / broking altogether. We are not allowed to nor should we provide property related advice. All we do is advise regarding structuring of finance and various products available in the market. People go to a mortgage adviser / broker to determine how much they can borrow or obtain the funds they need to go through with a purchase. Their decision to buy property is based on other factors or other professionals.
Most of the “rubbish” I have quoted has come from the most respected economic commentators in the land; Gittins, Colebatch, Kohler, Garnaut … not to metion The Reserve Bank of Australia, and of course, the piece by the chairmain of GMO.Economics is a field where no-one is ever wrong. The problem with most economists (and yourself) is that they tend to follow the flock. They do not want to go out on a limb. If their commentary is incorrect, then there credibility remains in tact because everyone else was saying the same thing. I for one like to do the opposite of everyone else.
I spend plenty of time researching property, both reading reports (thanks for the PMI report BTW, which confirms my views) and getting out into the real world. I went to three auctions today. They all passed in without a bid. I haven’t seen anyone bid at an auction for 6 months.I think you missed the point of why I provided the PMI report. I hope you looked at Table 4 closely. As for your comments regarding auctions, I guess you believe that the exit tax in NSW has nothing to do with it either.
In my opinion, most of the property slump problems stemmed from the fall in NSW property prices. This is off the back of taxes on holding property and taxes on selling them. A lot of investors wanted out because they felt the impact of holding property or selling after the exit tax was introduced made holding property less attractive. I tend to agree.
Unfortunately, everyone tried to act at the same time and it resulted in a huge over-supply of properties coming onto the market. With the interest rate increases, this made the problem a little worse but I have found that most people do not consider current interest rates as expensive when they consider the rates of the early 90s.
Assuming interest rates do not increase dramatically over the coming two years (which is what I firmly believe), I do not see the doom and gloom that you guys are preaching coming any time soon.
I am also of the opinion that when the Liberal Government takes over the Senate in July, things will change very quickly for the better from an overall economic perspective. Economic results will be reflected in the months following this and consumer and investor confidence should respond accordingly.
Please note that these opinions are my own and I don’t think you will find them written anywhere!!!
Robert Bou-Hamdan
Mortgage Adviserdmichie, when the ‘bubble’ bursts as you keep advocating, I may consider letting you know of my intended investments. Otherwise, unless you can come up with some real investment options ON YOUR OWN instead of regurgitating other people’s economic commentary and posting numerous links to the same rubbish over and over, your are all on your own mate.
Here is an idea… try putting as much time into researching property, shares and alternative investments as you do into learning about a negative economic outlook and you will have no problems.
Robert Bou-Hamdan
Mortgage AdviserPeople are generally negative regarding things they do not understand or find ‘difficult’. If you are happy with your due diligence, don’t let the ‘don’t be’s’ put you off.
Just regarding your loan, why are you going with 78% principal and interest? I would recommend 80% interest only regardless of your other structuring. Get your whole portfolio looked at and you may find you can make additional investments at a quicker pace.
Robert Bou-Hamdan
Mortgage Adviser
