Forum Replies Created
- TheNewGuy wrote:I just renewed all of my insurances. I have Income Protection for 3 months to death, at 80% of my salary. 3 months to 24 months is in my super, and 24 months+ is via Macquarie Insurance.
For permanent injury / death, I have $750k lump sum, and a pension paid to my wife ~ $15k p.a + CPI for the rest of her life.
I have ~ $800k in loans, including one IP and our PPOR. So this should leave her in a relatively 'ok' state, by providing no mortgage and a yearly income (including rent) of about $35k. I don't want to be worth more dead than alive!
Just correct me if I am wrong here, having multiple income protection ( i.e. months to 24 months is in my super, and 24 months+ is via Macquarie Insurance)…isn't it duplicating the process,….i understand both gives protection for different timeframe…..but who would cover you for first 24 months just your super?
Also, i guess you have ur injury insurance (TPD) outside of super….as in some super you'll still have to meet condition of release for this benefit to be paid out…..
PLC wrote:Richard, is it still a maximum of 5 loan splits? I seem to recollect that ANZ changed to unlimited loan accounts under the one breakfree package recently?
That's even better….but still if they allow to topup the existing loan account to release PPOR equity would be better rather than new loan account….Is it possible?
Seems like it is matter of who you know in ANZ for loan drawdow, when i asked my MB before taking on loan, he said it's impossible….
Terryw wrote:Also, once you get the money into the loan then how do you use it.Terry, that is something I am keen to hear from Richard as he had several clients done this….hence my question about how to use the money from redraw to pay for investment costs…..
Qlds007 wrote:Anz allow 5 separate loan splits under a Breakfree package so no reason why they will not allow a further split.If there is an issue merely increase one of your existing Investment loan splits.
Richard, I always get confused with split loans…..just so i get this right split loans basically means i can ask ANZ to split my existing IO loan (which is equity release from PPOR)….and get them to create another loan account (with additional equity release from PPOR) …so they will end up creating new loan account for additional PPOR equity release……which means I'll be end up having 2 separate loan accounts both equity released from PPOR….i was thinking to top up the existing loan account rather than 2 separate loan accounts?
Jamie, thanks for your confirmation….
Qlds007 wrote:Anz will allow the funds to be paid back into the loan itself on drawdown without closing the account (I have done it on 2 forum clients loans which settled over Xmas).Richard/Jamie, that's good to hear that ANZ does allow the loans to be paid back on drawdown. Just so i
understand it right u mean using redraw…..so drawdown the IO loan and park all the money on redraw on the
settlement….and use it from redraw when you are ready…is that right? that means i don't need offset accounts then…
Given if I've understand this right….question for you Richard as you've done it for some of your clients…how to
use this redraw money to pay for for example deposit or something….the reason I am asking is i've been told by ANZ
that they don't allow cheque to be written from redraw account….so basically i've to manually take money from
redraw and park it somewhere (not mixing with non deductible for sure) to write cheque from…..i wonder what your clients
did in that situation? as somewhere it this forum there was discussion about not breaking the nexus…..
currently I've three loans (secured against IP, secured against PPOR & equity borrowed from PPOR) all of them
are seperate IO loans….now that I am planning dip into equity of PPOR again…just wondering can I top up the
existing IO loan or additional equity needs to be setup as seperate loan….atleast this way i avoid having multiple loan accounts…
will ANZ allow that….??
Terryw wrote:[No, it is possible to do all without crossing at any stage. But in the early days cash is tight and equity is tighter, so clients often try to access equity and take out little bits at a time. After a while growth kicks in and you might take one property up to 80% and by the time you use that LOC then the next property has increased to 80% and so on. So after you increase each LOC you then go back to the first one and repeat. – theory anyway. Usually your income won't growth fast enough to keep things usustanable.
OK….so basically LOC is setup for each equity release in early days……dip in to them early….convert LOC to IO once it is used……then let the time & compounding growth do its magic….it's to hoping that atleast one in your portfolio will have excellent growth then repeast the process….
TheFinanceShop wrote:Some lenders like Suncorp, St George and Macquarie allows you to easy create sub accounts.If we are talking about a loan amount of $595k then Westpac will do 4.97% (plus $1,000 cashback), CBA will do 4.95%, Homeside (NAB) will do 4.94%.
Second tiers lenders will even go lower but again don't focus on rate – focus on who will give you the most equity.
If you are with ANZ try doing a modelled val first.
Shahin, i think even with ANZ breakfree package they allow you to have unlimited loan accounts but ofcourse not unlimited offset accounts…..given cross collaterising is issue i only have option of setup different facilities for each equity release….
About interest rate….yes i am not gona move for couple of basis points….i think ANZ realizes that and that's why they don't budge on rate….what is modelled val ( i thought they only had 2 types….curb & full)….which lender you found lately been coming higher on MELB valuations….
Terryw wrote:You could have one big LOC but, this would mean it is secured by each property which is cross collateralising.These sorts of issues arise in the early days when the investors are trying to get access to equity quickly, but after a while things will slow down as more property is purchased and harvesting equity slows down a bit.
reading plenty of forums…and one message i got out of them is to avoid cross collateralising. So basically i would have to have separate facilities for each equity release throughout portfolio…..
Not sure about your other comment Terry, that this sort of issues are only faced in early days of investiing…….i think if you are going to avoid cross collateralising then separate facilities has to be setup to fund the next purchase….until one of your property has enough equity so you don't have to dip in to the other one…..is that what you meant….
Terryw wrote:It will be a small amount and not of any significance. The LOC can be rolled over into a normal IO loan once drawn too.
Terry, is it possible to have one LOC where all the equity from PPOR, IP1, IP2…….IP6 and so on can be released as required….If that is the case then i can convert LOC to IO once it is used and repeat the process whenever I am ready to make another purchase…..in that way basically I am paying higher interest only for the time I am doing my DD…but i wonder if converting LOC to IO will be smooth and fully supported by bank……what's the success rate of converting LOC to IO…..there has to be some T&C i would believe….
TheFinanceShop wrote:Rate is good. Can you do better? Yes. Should you move because you can get a better rate? No.But you should consider moving if another lender gives you the same deal or better deal plus and more importantly a stronger valuation (in turn more equity).
I guess the question is why pay LMI if you don't need to?
Shahin, which lender from ur exp u reckon can provider better rate than ANZ on 595K+borrowings….curious any Big of 4….
I am in all favor of avoiding LMI but last year's valuation tells me that I will have to go further…..
Terry, I want to avoid LOC if possible, i understand that it gives much more flexibility from the top off point of view….but it comes with higher interest rate……
Shahin….I've been with ANZ from ages….and their breakfree package (similar to all Big 4 offers) suits me…..and i did not pay LMI on PPOR or PI1……they have discounted abt 0.91 on my 595K+ borrowings…..
TheFinanceShop wrote:I would generally go for an standard product with a linked offset and I would do this for each loan account or do it as a redraw as some lenders likeShahin, valuation is on to do list……but i m sure that I'll have to go up to 90% this time……standard product with offset is my preferred method as well…..similar to what I've done for IP1. I'm with ANZ and they will charge me extra for additional offset outside of my package fees….
My concern is that if I setup separate loan for each equity release on my investment journey then i will be end up having plenty of loan accounts and ofcourse multiple offset accounts……note that i've already released equity for my first IP in Loan 1 account from PPOR…..can I top that off rather than creating Loan 2 for the equity release from PPOR this time…..atleast in this case each property will have its own equity release loan account….which i can top up throughout my journey…..thoughts???
Terryw wrote:LMI wouldn't be deductible in full because part of it would relate to the existing properties. Probably base it on a % of the total amount borrowed.Terry, I am borrowing upto 90% off existing properties (1 PPOR & 1 IP) to fund my second IP….which is for investment purposes. In that case shouldn't LMI on both PPOR and IP1 be tax deductible? or in ATO's eyes PPOR LMI will not be tax deductible as it is PPOR but IP 1 would be? How do ATO sees this arrangement?
thanks
Benny wrote:Still applicable but to a lesser degree in Brisbane – it is about 25Km to the Coast when heading East.Benny
Benny, what is the preferred side in Brisbane?
Qlds007 wrote:Agree with Benny we are starting to get a mountain of forum clients ask us to source investment property for them in Brisbane and the requirements of each investor is totally different when it comes to price, market demographics, unit or house, etc etc.I certainly know where i am putting my money in Brisbane but that is not to say it is for every client.
Cheers
Yours in Finance
Richard, certainly agree with different requirements for every investors….
I am in early stage of my reaserch for Brisbane as well. No idea about this market and nor am i after list of suburbs from someone to tell me where to invest (surely not media)…
My criteria is buying a unit of some sort (no high rise apartments) within 10K of Brisbane. Preferable 2BR..(subject to demographics and other research)
Wondering if I can pick your brain about the mentality of Brisbane ppl specially comes to living…..capital growth….what sort of property they prefer…
lifestyle….things investors needs to know before buying
Is there any part of the city u prefer for your clients….for 2 bedders…or something?
do they prefer living in particular part of city more ( e.g for MELB in eastern sububs always had more capital growth than western side)
cheers
thanks Mark. Excellent Advise…..
wilko1 wrote:yes your bank will be on your certificate of title. it will be under a heading called Mortgagee. Basically to prevent you from selling the property without the banks authority or finding out.[/quotewilko, so do i require any of these docs….currently i don't have anything like 'certificate of title' 'land transfer' or something…..this thread got me thinking that i don't have any docs apart from 'Contract of sale' to say I am in process of owning this property…..
just wondering if these documents are required….I've filled out the 'Transfer of Land' document during the settlement but not received anything about it and my conveyancer advised that bank's name will appear on 'Certificate of Title' until i finish paying off the mortgage…..am i missing something here….all i've is 'Contract of Sale'….
Thanks Jamie…
i calculate the interest charged every month with simple excel spreadsheets….and glad that no issues so far….regardless i found that as very exercise..
adam.p wrote:Jamie M wrote:s0805 wrote:Jamie M wrote:adam.p wrote:Thanks Jamie. That's what I had in mind.ANZ are a bit funny – they see changes such as reverting from P&I to IO as "credit critical" so ask for a new application to be submitted. There's been moves to change this – and I've been told that these sort of adjustments can be made in branch now, but I'm still reluctant to send my clients direct to a branch to have them fiddle with their loan accounts.
Jamie
Hi Jamie,
I am in process of getting this arranged and that is what they've advised me as well, more than 1 month in waiting not getting the docs right. The process change at ANZ is a joke and time its taking as well….what are you advising your clients full application OR have they started doing this in branch now?
Cheers
Thanks Jamie/Adam….I've finally received the docs and ANZ advised they had to do the full application in my case (from P&I to IO) cause they call it 'Credit Critical' application or something….but atleast they've advise if i need to roll over my IO period after existing IO expires it should be fast tracked not full application….
cheers….
A lot will come down to who lodged the application and how it was presented. Every bank has it's issues with processing – but if the application is submitted correctly from the start, there's a much better change of it all going through without too much hassle.
Cheers
Jamie
The reason I was in the bank before were to change from P&I into IO. But this is mainly because I was promised IO loan but when it was very close to settlement date, they produced P&I loan and didn't have enough time to change it.
After 5 months, I went back to the branch with different manager. There is no notes left in the system to change it to IO loan or even mentioning wrong loan being setup, so I have to fill up "Change of Request" form with reason as "Tax Planning". No other forms submitted.
The process took 1 week to get it changed.
Jamie M wrote:adam.p wrote:Thanks Jamie. That's what I had in mind.ANZ are a bit funny – they see changes such as reverting from P&I to IO as "credit critical" so ask for a new application to be submitted. There's been moves to change this – and I've been told that these sort of adjustments can be made in branch now, but I'm still reluctant to send my clients direct to a branch to have them fiddle with their loan accounts.
Jamie
Hi Jamie,
I am in process of getting this arranged and that is what they've advised me as well, more than 1 month in waiting not getting the docs right. The process change at ANZ is a joke and time its taking as well….what are you advising your clients full application OR have they started doing this in branch now?
Cheers
