1. Gross rent taken at 70-80% only

2. Servicing rate is based on current standard variable rate + 2% 

So are you still positive after increasing the rate to 2% and taking in gross rent of 70%?

3. It will depend on location as well- http://www.genworth.com.au/lender-centre/tools-and-resources/location-guide-australia/ lenders like cat 1 and cat 2 locations…cat 3 can be a bit iffy and they may discount rent by 60%….

Congrats Jamie!!! 

Converted your super to an account based pension- smart move

Lenders work their serviceability based on 2% higher then the current rate; incase the interest rate changes.

Sub-renting can not be included into serviceability as it's not considered stable.

1. Unfortunately with no real income coming in to service a debt, the answer is no.

2. Im guessing your talking abt income protection? well this only works if your working and lose your job because of some injury or unexpected event..Lenders also can't use this as "serviceability" as it's also not reliable. 

3. They will start chasing you up once you miss your 1st payment…equity doesn't mean anything…equity doesn't;t pay the loan/interest- they need to sell to access the equity. 

4. Not sure what your asking here…

Once you get a full time permanent job, even for 1 day; it's possible to get the home loan even on probation, as long as the other financial factors within the loan matches up. 

depends on the bank, some banks are more flexible with cash out.

But yes it does get easier as your LVR reduces. At 85% or below theres pretty much no restrictions. 

Most investors stay around the 90% mark max for equity release. 

Wouldn't say it's a reflection on the current market, short term money and cost of funding is extremely low right now…the lowest it has been for a while and will stay at this level for the next 12-18 month; hence why we have been seeing massive discount on offer by some of the major players and non-banks.

Having said that, Westpac has announced a 1% discount on new loans over $500,000 so this might be a reason for the increase in the fixed rate; spreading their cost of funding around and targeting the variable rate more.

Let them know you want to release some equity to invest into property – they will automatically ask you if you have found a place , as they would want to finance and lock you in for the 2nd mortgage as well

I'll provide you with a general run down that suits 70% of investors…however you should really obtain personalized advice rather than follow a generic general advice.

Baisc Steps

1. Valuation carried out

2. Equity release based on amount, LVR and valuation

3. Make sure they provide you with an SPLIT loan, meaning a "second" loan must be created and not just added on top of your PPOR!!  ( important)

4. Also make sure they provide you with an 2nd 100% offset account so that the newly released funds can sit in this account without occurring any interest and also it keeps it separate from your PPOR offset ( also very important)

^ Sometimes you can skip step 3 and 4 by using an LOC. ( but this can come at a cost and it's not always suitable) 

Unfortunately your lawyer is correct …if you don't notify the vendor before the cooling period ends, it's atomically  presumed your going ahead with the sale. So you may be liable for any short fall.

Hi Katie,

Welcome to the forum.

—Meriton–

* One of the largest and most respectable developer; good quality build and on time most of the time.

* Their stock/properties generally priced slightly higher than the market compared to another OTP ( off the plan)- so hence capital growth can take a bit of a hit…

1. Your question " What should I be looking for in an investment apartment"

Depends what your after, every ones situation is different. factors to consider

– Your financial position and capacity

– Experience 

– Risk tolerance

– Support ( family/ financial )

– Short/medium and long term goal

– Comfort level with investing

– Tax

– Capital gain tax/ Land tax

– Where you are currently in your "life cycle" -ie expecting kids? marriage?

– Stability of work

Generally speaking, OTP carries a certain level of risk and i personally consider it an poor investment unless you have some extremely trustable knowledge source of information that advise you the apartment or location is set to increase in value….as it's very common for OTP apartment to lose it's value overtime due to oversupply, environmental factors, market slow down, builders over pricing, over supply of stock in the same development and lastly mass sales/off loading of stock by the builders and another buyers. 

Before considering OTP as your FIRST property- make sure you have a min 15-20% deposit ready to go …now not later + have a stable work history. 

Regards

Michael 

Steve – Jamies only gave you a "general " list of lenders that might do the deal…- Do yourself a favour and contact Jamie so that he can carry out a proper analysis.

Regards

Michael