1. Don’t cross! if you have enough equity to cross your loan…you have enough equity to do it as 2 separate loans with a split loan or LOC.
Plenty of topics regarding crossing etc…

2. 95% LVR non-genuine saving loans is available- but i can tell you now it’s close to impossible to get this approved if it’s done using a unsecured personal loan- i have done soooo many non-genuine saving loan in the past and the LMI people will not touch your loan if it’s done using a personal loan- especially if your borrowing the stamp duty as well ie zero savings…

3. All non-genuine saving lenders has a max cap of 95% — so you will need to have some money for the LMI.-

4. Also if you need to resort to getting a personal loan and potentially borrowing 105% of the money + LMI cost to get the deal done …i would say your NOT ready to buy. As not only are you getting a mortgage your also got a massive personal loan to take care of now as well…no matter how POSITIVE the deal is…it won’t make up for the lack in cash flow…

4. You will make a lost every month using a personal loan, unless you buy something over 11% in yield

5. Doing the math; Say you purchase at $300,000 with a rent of $600 p/.w ( yes it’s high….but lets presume best case scenario?) with a gross yield of 10.4%

– $15,000 for the 5% deposit
– $13,000 for stamp duty ( VIC)
-$3,000 for another closing cost and searches etc..

= $31,000 personal loan – 14% interest over 5 years = $721p/m

—-

-2850,000 loan at 95% ( presuming it get’s approved)
– $7,500 for LMI ( also presuming it’s get approved and can be capped over the 95%)

Loan – $292,000 – rate of 7% (sample rate) = $1,942 p/m

* Your breaking even on a 10.4% yield
* have not taken in consideration management fees and another cost
* If rates goes up…..
* No tenants….

6. To find something with over 9% yield it would most likely be a security not located in the metro, unique security or should i say it most likely wont be acceptable or approved at 95% LVR lending, unless you have a past history or some good backing in security/equity….

Out of 100 properties that has over 9% yield i can say at least 85% of them are done at a LVR of 90% or less, and we were able to get 95% LVR for the remaining part because it was a strong file..and having an personal loan will weaken the file.

Sorry for a negative post, but we in the past have dealt so many 1st time investors who thought this would be an easy deal simply because they had a good income…

There are plenty of good deals out there, but it may NOT be the right deal for you at this point in time. Learn to save up first.

Regards
Michael

usmic wrote:

Hi I recently graduated from university. I took a Fee help loan of 85K + interest. Will his have a huge impact on my borrowing capacity?

Define ” huge”

But yes it will have an impact..

Yes they do.

^^ Derek is spot on!! I have a feeling Derek is a Buyers agent by day and a broker by night

But in summary, doesn’t matter how much of your LOC you have used banks will look and calculate on the full limit.
Also the bank has the right to reduce or stop your LOC at their discretion….so your broker will need to do the research before hand to check and get an idea what your property might be worth – Most brokers should have access to a range of valuation tools.

Regards
Michael

I been too a few of Nathan’s talk and im a true believer of this strategy ( not necessarily where he buys…but the strategy behind it) i have also referred some of my clients to his program and no i don’t receive any “referral” fees which is fine- as it’s not my business too.

Learn and adopt the strategy too your own experience, budget, lifestyle, risk tolerance and style.

Regards
Michael

Maybe if you can save just a little bit more and push your range too low $200 you will have a bit more choose in Western Sydney – ie TREGEAR ( $200,000- $230,000)

Regards
Michael

Strata, management fee + have to paint and change the carpets every x number of years

Generally having one of the big 4 for your first 1-2 is ok especially for your PPOR as they have decent policy, rates and access to more ATM’s etc…once you start to build a sizable IP portfolio/ managed funds etc we would start to consider using lenders with better serviceability model ( from a investors point of view) and utilizing different type of techniques ( When to fix, P/I , Interest in advance, equity release ).

If you could provide some numbers, LVR and how much savings you have etc might be able to work something out…no promises

Done a loan for a client in a very simliar situation, Client knock down the property and realize 3 month alter the land value is less then they expected + they had no deposit to make up for the short fall or to start the construction.

Approached us; we supplied private finance of $85,000 secured against their 2 cars and had to refinance their loan over to an acceptable lender that was willing to accept non genuine savings construction ( ie the private personal loan) over 80% LVR.

Doesn’t suit everyone as every situation is different.

Regards
Michael

Pretty sure OP jsut accidently used the wrong terminology – i be scared and worried if this is what the accountant advised