If you pay down the LOC to a balance of $0 some banks will close this out….so your best to apply for a standard loan + get an offset account…

Hi Smartcube.

As Jamie mentioned it does depend on your risk tolerance and future goal, so planning is key and knowing what each "purchase" would do to your cash flow and savings is helpful. 

Really need to know your personal situation to comment but giving you a general idea…

Say you did use a 20% deposit – on an $540,000 purchase the outlay would be $108,000 for deposit + ~$20,000 for Stamp duty = $128,000…all good, you still have $72k in cash if you wanted to buy other IP in 2 years time; also to avoid LMI you will have to find other $128,000 ( presuming same price)  so around $56,000 to save in 2 years OR you could pay for LMI on your 2nd purchase. 

^ Sounds all good…now this is where it can get a bit messy and complex…Your future borrowing capacity.

1. getting your 1st loan would be easy as you have so much cash and im presuming no major debt ….Getting your 2nd loan "may" be a bit harder as you would now have a home loan debt from your 1st purchase and less cash and as life goes on more responsibilities, accidents, more lialbiltes etc…

2. Borrowing capacity tend to drop off as you buy more ( a very general statement as there are some expections  ) so getting your 2nd loan may be tricker and much harder especially with LMI involved

3. So if you find out that your personal borrowing capacity drops off dramatically after your 1st purchase than…. max out your LMI exposure early if your planning on buying again in a short period of time…leave the "Easy loans/ 20 % deposit loans " till much later when everything becomes more complex and  harder to approve/afford…

4. Yes you can claim LMI back over 5 years, if it's used as an IP.

5. You may want to buy your PPOR next and it may be > $540,000 were you gonna find the 20% deposit now?? always better to pay for LMI on your IP compared to your PPOR.( lower loan for your PPOR VS your IP)

Go speak to your banker or broker regarding

1. Current borrowing capacity

2. Future borrowing capacity AFTER you bought your 1st property ( ie 2nd future borrowing capacity)

3. Future borrowing capacity with standard rates 1.5% higher than current rate  AFTER you bought your 1st property ( ie 2nd future borrowing capacity)

4. Re do number 2 and 3 based on a 90% and 80% LVR borrowing. 

Plan plan plan.

Cheers

"fair purchase price" doesn't always go by rental return/yield, only works for certain areas and property type.

There's a lot more to "fair purchase price" than JUST the rental return..

What are you actually looking for ?? a number/purchase price where you can break even with your rent??

Find out who the valuer was for your Hertiage deal; than choose a diff valuer – 

But as Jamie correctly mentioned, if it's a small town it's likely there would be probably only be 1-2 valuer servicing that area….but it doesn't hurt to try ( might cost you in terms of the valuation fee) 

Sorry only can apply for the loan to purchase the asset.

– No top up etc…

1. A good credited broker will give you the commission break down of each lender + a summary of the top banks he/she has submitted in the last 12 month and lastly they will def give you a reason for the recommendation. Discuss and adopt/change if required. 

2 The difference btw commission btw the highest bank and the lower bank is minimal; 0.02-0.10%— so i be supervised if a broker or ANY service provider makes recommendation on commission alone as the product may be "unsuitable" for the client in the long run. In any business it's all about stability and word of mouth referral. 

3. End of the day, the broker or service broker should give you a reason for the recommendation; for a broker it be mainly based on;

– Policy

– Equity 

– LMI

– LVR

– Acceptable security

– Speed

– Customer service

– Meets your requirements

– Rates

– Fees

– Serviceability

– Loan structure

– Short and long term goals

4. If the product meets your requirements, i can't see why you have any issues. Lastly nothing wrong with going to the bank directly ( in fact my first loan before i became a broker was done directly with the bank i grew up with) but end of the day how can you trust the product  and structure on offer  is the most suitable? 

So trust plays a big part in a broker-client relationship….in any relationship for that matter.

Di you submit an application for constriction as well? and was it with the same application…..

So it's 2 townhouse that's on torrent title; just require a bit of land for the set backs.

Im in Sydney so not sure about the perth zoning for these development; but im currently in the processing of knocking down an old 1930 house and building 3 double storey townhouse on 3 separate title ( torrent)  – hornsby council and the place is zoned Medium density Residential.

Speak to the local council town planner – free info + they will give you a bit of heads up on what's require. 

This is where choosing the right banks and right structure helps! Depending on the banks some will limit the LVR and some may not even finance this under residential rate. Having said that there's a bunch of lenders that would go up to 90-95% for block of 4 or less and 80% LVR for a block of up to 10.

However if you have equity in another property you could potentially get an 105% loan ( Stamp duty etc..)

If it's strata titled; then the stamp duty will be aggregated ( if settled on the same day) and will be more expensive; if it's under one title then stamp duty is ok

Other cost;

– Land tax

– Council rate ( normally cheaper! )

– Water usage ( unless it has separate metered….very rare for older style units)

– Bank valuation ~ $300 per unit.

– Insurance is expensive 

– Cheaper council rate

– No strata

– CG and RY

– Control

– Can strata title later and sell off

list goes on!

Just settled on one last month and yes i applied for an 105% loan

Cheers

Michael

1. Presuming your going for an 80% equity release – you have $112,000  usable equity –and this is based on the bank valuing your property at $440,000..

Not sure where your buying but from exp property under $150,000  falls into 4 groups ( im generalizing here…)

– Regional towns

– Low population

– Small units ( 1 bedroom or studio's  most likely) 

– Over 55's or service apartments.

^ Not the type of deal a standard bank will want on their books at 90% LVR- but as i said it depends on the location and type of property.

Gopod start- http://www.genworth.com.au/lender-centre/tools-and-resources/location-guide-australia/ type in the postcode here and if it's a cat 3 or not even on this list chances are your bank may not support that area at the LVR you want.

Possible; but you need good planning skills and speak to someone who has either done something similar or know what they are doing from an investors point of view. 

Property investing requires time, 1-2 mistakes could possible make stop you on your track.

You have a "end picture" now you need the plans to execute. if you know how to execute; all good…if you have no idea – seek help from someone who does- ie a property mentor or an experienced investor.