Yep will come down to the area….

Northwest, South and inner west generally ok – like Dundas etc..
Some western areas- like penrith, Wilmot etc..average increase is around 60% of the total cost to build…and we are talking about re-value 1 week after build not 12-18 month later etc..

• This reply was modified 10 years, 5 months ago by  Mick C.

SMSF would be diff to the company you want to trade from as the SMSF is a non trading entity and structure.
Also when you do end up buying something with your SMSF the company bear trust can only be used once.

CallieFort wrote:

Hi all
Us folks in Perth are not used to hearing about company titles, so now hubby and I are in panic mode….apparently only the CBA will offer a loan to purchase property on a company title.

Very common in the older part of WA like freemantle and the south coast.

CallieFort wrote:

Hi all

We can borrows the funds using our home as guarantor, we thought we could put down a cash 20% deposit and have a stand alone loan! but apparently no banks can mortgage company title shares..

Confused as nobody in Perth is used to dealing with this and would,like some feedback :)

Cheers Callie

1. You DO NOT need a guarantor loan….that’s just stupid as you have a PPOR worth $950,000 and your gonna tie this down to this IP…no way- Cash out the 20% + Stamp duty and apply for a SEPARATE free standing loan with a diff bank using the CASH equity as security.

2. 90% LVR on company title is possible but it wont be the Big 4.

3. You have a healthy position/financially and equity wise.

——

Regarding investing in a company title there’s a few things you have to look out for + be aware of.

1. Check the restriction on the company’s by laws
2. Who owns what and does any one or 2 person have majority hold on the company title
3. What restrictions does the By law have in regards to selling and renovations ( The bank will want this by law by the way)

It’s hard to sell a company title property, as you can see from your own experience so generally it lacks that capital growth as less demand for these sort of properties…unless it’s bought well below the market and has a good company by law in place.

If your income fits that’s banks serviceability ( every banks serviceability is slightly different) than yep it’s doable.

You have the deposit.

Example:

Existing home worth $400,000- with loan of $100,000 against it ( called property 1)
Want to buy a new property valued at $800,000 ( called property 2)
– get the 20% deposit ( $160,000) + stamp duty ( ~$30,000) for the $800,000 purchase from Property 1
– New loan applied for the remaining 80% to purchase property 2

As long as you can afford the loans, it’s a done deal.

You have approached some average /consecutive lending banks- hence their response ” you cant afford the loan”- not all lenders are the same.

Sit down with a broker ( as they will have access to multiple banks + no credit hits) and obtain a free quote an recommendation on your situation.

Cheers

Need more info….A bit vague

jcso99 wrote:

Thanks for the feedback. I have a couple of follow up questions:
1) RMB income – I remember speaking with a mortgage broker in mid-2013 and told them that my income is denominated in RMB and their reply was that no bank will accept RMB salary. Hence, I didn’t bother to explore other lenders cos I thought RMB denominated income is not welcome by Australian lenders. If that’s not the case, I might explore other options

John

Can name around 7-8 lenders off the top of my head that deals and accept RMB
– ANZ, Westpac, St George, AMP, Bankwest, CBA, Citibank, Homeside,…..

But i would not advise you apply to every single bank and hope for the best as this would trash and kill your credit file; even thought the list of banks accept RMB it doesn’t mean they would necessarily like your deal or approve your loan- it will cone down to their credit policy based on your situation and serviceability and overall risk of the deal.

For example, i can probably safely say Westpac would most likely be a no deal for your situation as you have 5 IP and your rentla income may be more than your standard income ( rental reliance policy) + your standard income is a foreign income as well.

Regards

Yes your repayment will jump quote a bit as it will change to P/I one a 20 years repayment plan.

As mentioned you can refinance back to an I/O terms or back to 30 years etc..The only risk is that it’s depends on the lenders approval in 10 years time- i have seen plenty of case where the borrower is close to retirement age and the loan flips over to P/I and they struggle; trying to do an refinance to 30 years on other I/O term when your a bit older can be a nightmare for some ( Not all) so plan ahead as the lender needs to reassess your application again.

– Will you still have a job?
– Will have more liabilities or an reduce income?
– If your age suitable and financial capability suitable for an extension?
– LVR

Cheers

Cross collateralization is generally a bad idea in most cases; it advantages the banks and disadvantages you a a borrower; eventually you will need to uncross when you sell.

Cross collateralization is more common when business finance is involved and on some rare occasion commercial finance.

Since these are  just  standard residential properties tthan you should and can avoid cross Cross collateralization and still achieve an 100-105% borrowing with no LMI; a much cleaner cut from a tax and loan perspective! and cheaper in the long run.

Umm am i missing something….the numbers doesn't stack up, well the profits anyway.

Purchase cost: $280,000-

Stamp duty + softcost: $10,000-

Build cost: $650,000-

Subtotal Basic base cost: $940,000-

Selling new 3BR townhouses = $410,000+ each x2 = $820,000???

I haven't even included;

– interest ( holding cost)

– Marketing and selling cost

– Capital gain tax

– Professional fee

– Landscaping cost

etc…

Am i missing something???