Forum Replies Created
Low Doc loans are resigned for people that may not be able to substantiate their income (e.g. self employed persons). This may arise due to their tax returns not reflecting their true cash position or if they are not up to date with their records. They were not designed for PAYG earner (employed persons). Essentially, lenders are a bit suspicious when PAYG earns want to use a low doc loan (because all PAYG earners should be able to supply proof of income – e.g. play slips). In fact, most low doc loans exclude PAYG applicants (i.e. PAGY applicants still must provide proof).
Just be aware of the restrictions and purposes of low doc loans. And always remember your obligation to provide accurate information. (not that I’m casting dispersions over anyone)
I think Simon (Mortgage Hunter) and I are on the same page on this one.
Cheers
Stu
I’m sure Steve (and other people on this site) help people that help themselves first. So they question becomes… can pensioners and unemployed people help themselves?
Cheers
Stu
There are a lot of lenders that will look at doing this. Some don’t require any proof of income and some will give really good deals with full proof (low rates and fees). It really depends on the quality of the development.
Some considerations will be:
– Amount of your equity.
– Location and type of development.
– Builder reputation.
– Estimated profit.
– Existences of any pre-sales.
– Financial projections (and how tight they are).You can capitalise interest during construction and can borrow against end value.
You can normally borrow 70%/80% of land value (with permits) and hard construction costs or 70% of end value.
In addition, it’s easier to get these deals set if you’re borrowing over $500k. Not many lenders like the smaller deals.
Hope that helps.
Cheers
Stu
Hi Marie
Some potential costs may include:
Settlement fee Approx. $50 – $100
Title searches Approx. $20
Mortgage registration and deregistration (govt charge) $128 per property
Discharge fee** $150 – $300 per loan
New application fee ?** Discharge fees should be confirmed with your lender as these costs can vary significantly from lender to lender and product to product. These costs should be stated in your original loan documents. This is probably the most substantial cost.
Best to ask your lender/broker for a full list of fees.
Very important to ensure you are aware of all costs before committing to the refinance.
Good luck.
Cheers
Stu
P.S. Oops – selling house – be aware of all discharge fees and/or early repayment (break fees) associated with new loan. If you sell you may have to pay these fees so best to know what you are getting into upfront.
Property & Finance News
at http://www.prosolution.com.auLiar, liar, liar Richo… I agree with that at least!
I am 28 (29 in Dec). I look like Disco Stu off the Simpsons (at least to Richo anyway).
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auThanks to everyone that replied. I have enough people testing the spreadsheet at this stage. Once its completed I’ll let you know.
Thanks.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auHere is the link… http://www.mycreditfile.com.au/personal_information/free_credit_services.asp?CountryID=1&UserTypeID=11
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auSuncorp may or may not be the best answer… I just thought that I would get some discussions going on the lenders that may be able to help Harold. Talking about the specific lenders will help Harold and other readers increase their knowledge. Just a thought…
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auHi Harold
I think Suncorp Metway may be best for you.
– They will do units over 45 sqm.
– They may do 80% LVR.
– You sign a Low Doc declaration setting out your income (you will need to provide an ABN to prove that you are self employed).The loan details are:
– Interest rate: 6.47%
– Application fee: $550
– Ongoing fees: $10 per month.
– Break fees: $550 for 3 years.I hope that helps.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auCome on guys… I’ve only got 3 people so far.
Is this something people would be interested in doing? Would you guys spend 5 minutes checking your statement now and then or is it a bit too bean counterish?
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auI understand that property is not defined as a security under the financial services legislation (including the Financial Services Reform Act). Therefore, dealing in property is not heavily regulated. I think this is the whole problem.
I think property advisers should be licensed (in the same manor as financial planners). This might take some air out of their sales pitches.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auFull disclosure is required.
Couple of things you can do is:
– put all cards in partners name.
– decrase limits and increase them again after settlement.
– use charge cards instead of credit cards (Amex/Diners). These do not affect your borrowing capacity.Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auI’m yet to find a good consistent lender. Do you agree Terry?
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auYou may also want to try:
– Liberty (www.libfin.com.au)
– Pepper (www.pepperhomeloans.com.au)
– GE Mortgages (www.gemortgages.com.au) but they do not deal with the public direct – must be through a broker.Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auHi Resurrect
CBA’s offset is very ordinary… so probably not indicative of a normal offset in the market. CBA LOC is too expensive. On the whole I don’t think CBA is the lender for you.
Perhaps try ANZ. It’s offset and LOC are exactly the same interest rate (which is becoming less common). They also offer the best LOC rate on the market… 5.97% (if account is over $250k).
The downside to ANZ is that they measure the interest rate discount based on the individual product (or loan) balance and not total borrowings with the bank. However, using a combination of LOC and basic variable loans (e.g. Money Saver product) can deal with this issue.
Returning to your question… what’s the difference… generally the only difference (in terms of product features) is that you may be able to capitalise interest. That is, not pay the interest and let it accumulate in the account. The only other difference is cost – LOC are normally more expensive.
This is a big topic to answer. I have just written 2,500 words to answer this question. I’ll let you know when the article is published (and I’ll post it on my website).
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auHi Dogs
1. Don’t have loans cross collateralised so that you don’t have to revalue all properties.
2. Most professional packages will not charge for this (e.g. Westpac, ANZ, CBA, NAB). Most allow you to do at least 1 revaluation per year at no cost… CBA & NAB are unlimited.The Big 4 are by far the most competitive in this market.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auHi Alf
Yes, it may be a “balancing item” when calculating the “cost base” for CGT purposes.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auHi Alex
I understand. No worries.
I do have a solution… I’m planning to open an office in Sydney and Brisbane in 2004.
Until then feel free to drop me an email if you ever want a second opinion (not that I’m doubting Melanie).
Cheers
Stu
P.S. Distance doesn’t impact ability to assist… we have clients in nearly all States and even in UK, Tokyo, etc….
Property & Finance News
at http://www.prosolution.com.auHi Doogs
Yes, I’ve heard that LMI is refundable. However, I thought the period was 12 months. It does differ from lender to lender.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.au
