Forum Replies Created
Some educated comments there George – well done.
FYI – One lender (Heritage Building Society) allows borrowers to make unlimited repayments on a fixed rate. Plus they also give you access to redraw (which is uncommon).
See: http://secure.heritageonline.com.au/LOANS/loans.html
I did a study on fixed rates over the last 10 years to see who is better off. Variable wins (especially if you don’t pay the standard variable)
See article titled “Fixed Rates – Who Wins? Borrowers or Lenders?” on left hand side: http://www.prosolution.com.au/free_articles/free_articles.php
Cheers
Stu
Hi Huey
The CBA discount offered to members of the AMA is the best that I know of (actually I though it was 0.75% off – but it may have changed).
ANZ has a medical package aimed at new doctors where they waive mortgage insurance.
FYI – 0.70% is the most lenders will generally offer. I have been able to negotiate 0.85% off for clients with $1m in borrowings (with NAB).
So if you total lending is less than $1m then go with CBA.
Cheers
Stu
NAB & CBA will do it. Both do not have a min. size.
Good luck.
Cheers
Stu
Hi All
The lenders have a right to invoke the Doctrine of Consolidation. However, the borrower has the common law right to object and the lender can only consolidate on limited cases (e.g. parties to mortgage have to be exactly the same). There are ways to protect yourself (e.g. wife & husband on one loan and husband only on invt loan).
Re: low docs – Don’t lie – it is illegal to lie on a loan application (regardless if is full or low doc). This is fraud.
If the banks won’t lend you any monies then its probably for a good reason.
I know, I know… the banks are too conservative… you know what you’re doing. Don’t be too bullish – Rome was not built in a day.
Cheers
Stu
Hi Sue
As I am spending my Sunday writing my Australian Financial Service (“AFS”) license application I think that the broking market will change considerably. Brokers may need to be licensed (AFS) from 11 March 2004. This will mean that they will have to meet minimum training requirements, dispute resolution processes, etc. This will be excellent. It is minimise the risk of this happening.
I strongly support this move and think that the public will greatly benefit from new regulation.
Once this requirement comes into affect I recommend that people only deal with a licensed broker. This will mean that ASIC has approved their processes (training, etc) and will minimise the chances of poor recommendations (and you can complain to ASIC if you have problems).
Cheers
Stu
My understanding is that the loan is IO for 15 years but the maximum fixed period is 5 years.
ANZ, Westpac and NAB offer 10 year fixed rates (around 7%). ANZ offers interest only for years IO.
10 years is the maximum fixed period that I know about.
Cheers
Stu
No worries.
Cheers
Stu
Hi Jen
Great post. Gives us all some perspective. You don’t have to get it right the first time to be successful.
Thanks
Cheers
Stu
Hi Kev
Calc is as follows:
Historic cost * (1 + inflation rate)^ years
^ = to the power of
Therefore,
$64,000 * (1 + 0.0428)^17 = $130,496
Therefore, the present value of the property is $130,500.
Cheers
Stu
Fullout
St George is the longest IO period that I know of. Your alternative is a line of credit – they are IO indefinately (i.e. no loan terms and minimum repayments are IO).
Cheers
Stu
I agree with you Simon. To say that negative cash flow is an overall bad strategy is, in my opinion, wrong.
I agree that chasing a tax benefit is definitely the wrong investment strategy – but that doesn’t necessarily imply negative cash flow strategy.
Not everyone wants to achieve the same goals. If you have plenty of income and want to generate wealth then high growth property is the way to go. If you want to replace earned income with passive (not truly passive though) income then negative cash flow property is not going to work.
Don’t be blind sighted and ignore other strategies.
Cheers
Stu
What will those crazy asparagus farmers do next? I really like that one Westan.
Keep them coming.
Cheers
Stu
I think you should consider your opportunity cost (i.e. the opportunities you are missing out by holding the property).
Will you have any money if you sell? What could you do with that money (i.e. how much could you make)?
I think you need to research your options.
Your accountant’s comments are correct so long as your property definitely does appreciate as expected. It will increase your wealth but not cash flow (which is fine).
You need to define your goals.
Lots to think about.
Cheers
Stu
I would say that there are no compelling signs for any rate changes. So the question becomes: “When is something going to happen that may cause the RBA to change rates?”
Who knows? Have you got a crystal ball?
There are lots of people that forecast the result of the RBA’s next meeting – many are wrong. So if they can’t forecast 1 month ahead then how good will they be forecasting 1 – 2 years into the future?
I put interest rate forecasters and fortune tellers in the same box.
Cheers
Stu
Hi Samson
See a good accountant/financial planner because there are heaps of issue to consider:
– your strategy
– tax planning
– estate planning
– risk mitigation
– etc.However, this topic has been discussed a lot of times so perhaps do a search (see link top of page).
Cheers
Stu
Ok Scremin
If you are returning home and will be working in the same industry (i.e. teaching here) then here are the requirements:
If you need to borrow more than 80%– you need to be in your job for at least 6 months and not be under a probationary period.
If you borrow 80% of less– Not be in a probationary period; and
– Have at least 3 months experience (if less they may still consider your situation so long as you do not have a probationary period).If you are outside of these guidelines then its possible the lenders will not take your income into account when assessing your application.
Hope that gives you more info.
Cheers
Stu
David
Properties have to be in metropolitan and major cities on eastcoast of Australia.
Application fees is 1.25% of loan plus legal and valuation fees.
I have not used this lender yet.
Cheers
Stu
Hi David U
Here are a couple of the asset lend products:
Homeloans Ltd – 65% LVR – 7.25% interest rate.
RAMS – 65% LVR – 6.99% interest rate.
Eurofinance – 85% LVR – 9.50% interest rate.I don’t think you can use a Low Doc because you have no income to self certify.
Fees, costs, etc. vary greatly so make sure you take these into account when comparing loans.
Hope that helps.
Cheers
Stu
Hi Kim
I would suggest you contact the MIAA (www.miaa.com.au) and speak to them about educational courses. They could probably point you in the right direction of some good courses that do not cost $5,000.
Re: getting customers. This is something all new business people have to face. This is not really mortgage specific thing. Do a business plan and marketing plan. Make sure you know where you can get clients from.
It may seem like a well paid job but its hard work especially if you are dealing with investors.
Cheers
Stu
