[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

May 28, 2003 - 5:56 am

Hi All

In my experience the banks have always been a bit sceptical about these arrangements. They normally want to see these arrangements in place for at least a year and that the rental income is shown on borrowers tax returns as evidence.

As you can see it’s a bit difficult to increase borrowing capacity using these arrangements in the short term.

Just my 2 cents.

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

May 27, 2003 - 6:55 am

Hi Smoke

You may want to check out my article on this site about this very topic. See https://www.propertyinvesting.com/freestuff (its the first article).

Property valuations for mortgage purposes generally have a tolerance level of plus or minus 10%. Therefore, a valuer would have to be convinced by strong evidence that the fair market value of your property is more than 10% higher than the contract price. This is often difficult to support. The exception is off-the-plan purchases as there’s often a substantial amount of time between contract signing and settlement date. Hence, there is a very good reason for the value differential.

Remember, the valuers don’t want to stick their necks out too far becuase they might get sued.

Just thought I would add my 2 cents.

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

May 22, 2003 - 5:32 am

Try http://www.baycorp.com.au/personal_information/free_credit_services.asp?CountryID=1&UserTypeID=11

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

May 20, 2003 - 1:25 pm

Hi All

The Court recent ruled that the taxpayers were entitled to a tax deduction for interest accumulating on income producing debt (Harts case).

The ATO recent (in the last couple of months) won the right to appeal this deceision – this is probably what the article was about.

However, the ATO have said that it will continue to deny any deductions until the appeal is completed.

APIM is probably right. If the ATO lose the appeal then the Government will probably change the law (becuase if they don’t they will lose a lot of money).

Hope this helps.

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

May 9, 2003 - 9:53 am

Most (if not all) lenders are very wary of lending in Melb CBD… This is always an good indication that it might not be a good buy (however there are always exceptions to the rule).

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

May 9, 2003 - 5:36 am

Hi Kimtruong81

There is not much difference between owner occupy and investment loan products, especially from a banks viewpoint. In fact, I’ve heard of some borrowers go the other way – say they are purchasing for investment purposes and then live in the property (so they can use the estimated rental income to qualify for the loan).

If you’re concerned, you can still apply for an investment loan, live in the property for one week, qualify for the FHOG, and then rent it out. The type of loan taken should not affect your eligibility for the FHOG. Furthermore (as far as I’m aware) there is no minimum period stipulated to to “live” in the property to qualify for FHOG.

Anyway, if in doubt, check your loan terms and conditions. You may not have an obligation to tell the bank if you change uses of the property (i.e. from investment to residential). Most don’t require this.

I hope this helps.

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

May 7, 2003 - 8:25 am

Hi Vinh

Banks use different valuers (for example ANZ use Charter Keck Cramer in Heidelberg).

Most banks use external valuers.

quote:

---

Currently thinking of using the NAB, CBA, Rams, Aussie Homeloans. I got pre-approval from the CBA but I think I can get a better deal somewhere else as I dont think I have exhausted all options yet.

---

Depending on the products you’re looking at I think there are some better deals out there. Be careful RAMS, Aussie, CBA (and NAB at times) can charge break fees (RAMS are the worst). It might be worth checking out a broker.

Fullout – yes, normally the cost of one valuation is included in a lenders application fee.

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

May 6, 2003 - 10:03 am

Hi Fullout and others,

I have written an article about this very strategy. The article addresses the lending issues associated with this strategy. You can find it on this site at https://www.propertyinvesting.com/freestuff.

It’s the first artice titled “No money down…”

I hope this helps.

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

April 28, 2003 - 1:22 am

Hi Essykay

I would advise client not to cross-collateralise for the following reasons:
1. It may increase your costs if you wish to drawdown on your equity (e.g. some bank charge extra admin fees if they have to deal with multiple securities).
2. If something goes wrong with one of your properties then they can sell all of your properties to recover their debt. If you only secure one loan with one property then they may not be able to do this. However, some banks have a clause in their loan contracts which essentially allows them to act on all mortgages held by the bank so be careful and read your loan documents.
3. If you cross-collateralised then you are tied to one bank for all your loans.

Generally, cross-collateralising decreases your flexibility.

I hope this helps.

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

April 28, 2003 - 1:09 am

Hi All

Here’s a trick. I advised a client and friend of mine to do this recently and it worked with no problems.

Borrow 80% and take out a personal loan for the remaining 10% (or what ever). The bank doesn’t mind (so long as you meet serviceability). You can then pay off the personal loan or refinance it into the mortgage after the property has increased in value. Either way you are better off than paying mortgage insurance (i.e. the cost of mortgage insuarnce is greater than the additional 4% (where personal loans are approx. 10% less mortgage rates at 6% = 4%) in interest costs).

Anyway, do the numbers to prove it to yourself. It might be worth considering.

Good luck.

Stu

Property & Finance News
at http://www.prosolution.com.au

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

April 25, 2003 - 4:16 am

Hi AllanFC

As a general rule, the further out from the CBD (of large towns/cities) the higher the rental yeild (and the lower the capital growth). Therefore positive cash flow properties are often found in country areas. I’m not that familiar with Nth Queensland so it’s difficult to give you examples but try Rockhamton (I have a client that purchased two cash flow positive IP’s there last week).

I this helps.

Cheers

Stu []

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

April 24, 2003 - 1:52 am

Hi Kutty70

As a general rule Brad Sugars (www.bradsugars.com) recommends that you don’t spend anymore than 10% of a property’s value on renovations. I guess this is a reasonable rule which is aimed at avoiding overcapitalising a property.

My only other advice is do your numbers. Make sure the renovations are justified (e.g. by reducing the likely vacancy rate or increasing your rental yield, etc.)

Cheers

Stu []

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

April 11, 2003 - 4:31 am

Thanks very much Essykay. I’m pleased that you found the info useful. Good luck with your future deals.

Cheers

Stu

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

April 9, 2003 - 8:00 am

Hi Scotty

I recently wrote an article about this very question (i.e. no money down strategies, building property portfolios quickly, etc). I interviewed about 15 or so banks and a valuer. You can find the article on my website at http://www.prosolution.com.au. Personal Investor picked this article up (which is also on my site).

However, it’s 1MB so you may prefer me to send it by mail or email it to you. If so just email me at [email protected] I will mail/email it to you (and to anyone else).

This should give you a detailed answer to your questions.

Cheers

Stuart []

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

April 4, 2003 - 12:50 pm

I looked at a residential development marketed by NII and went to their seminar. It was a waiste of time. The seminar was full of misinformation and scare tatics. The development was over priced and full of lies. They smelt! I would not go anywhere near them no matter how good a deal it looks.

Beware. Keep your eyes open.

Cheers

Stu []

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

April 4, 2003 - 12:29 pm

You guys are a tough crowd!!!

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

April 3, 2003 - 11:33 am

Hi Guys

Just a quick note. Heritage charge a break fee of one months interest if you repay a loan (this exists for the life of the loan).

E.g. If you have a $100k loan on interest only and repay the loan in 5 years time then heritage will charge you one months interest as a repayment fee.

You should include this cost in the AAPR calculation to make a fair comparison.

Nathan (newbie) – good luck with St George. I think they are the way to go.

Cheers

Stu[]

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

April 3, 2003 - 11:20 am

These idiots (i.e. James) taint the reputation of mortgage brokers. I have a couple of quick comments to make:

1. Don’t pay mortgage brokers anything! I have never charged a client. If I was in a situation where I thought I might have to charge (can’t think of one) I would only ask for the money after I have achived a result.

2. Always seek a pre-approval! You don’t know what you don’t know. Lenders change policies all the time. Sometimes people have credit issues (on their credit records) without even knowing it.

3. Don’t lie in application forms. A broker may suggest a low doc loan to get around lenders policies. They may suggest you to certify that you earn more than you actually do. Don’t! You never want a loan you can’t afford. You have a legal obligation to only tell the truth on application forms. After all, if your found out you will suffer, not the broker.

I don’t know any lenders that will approve a loan if you’ve been self employed for less than 2 years. James should have known this!

Gary Evans – do you lend to self employed persons with less than 2 years experience? If so, then I would like to know about your products. You can contact me at [email protected].

Lastly, I apologise for all the mortgage brokers like James. I would ask Ivan (and people like him) to make complaints to ASIC. That’s the only way we can squeeze these guys out of the industry. []

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

April 3, 2003 - 10:47 am

I’m a mortgage broker. I must admit, at times, we have offered clients small cash incentives. However, it can be difficult to do so becuase we spend a lot of time for clients making ensuring we find the best deal (include writting a mortgage analysis report, etc.) and ensuring the whole loan settlement process goes smoothly. This can (and should) take many hours.

As such, the question I would pose is “If a broker is going to rebate the majority of their commission then what quality of service do you expect you’ll receive?” If the going gets tough then do you think they will cut corners???

My advice is forget about trying to make money out of your broker. I would suggest focusing on getting the broker to really work for his money. Ensure they do a robust financial analysis and genuinely save you time by doing most of the admin and keeping on the back of the lender. After all, if they save you an hour then that’s anyother hour you could be on the road searching for your next property.

Anyway, just a few thoughts… good luck.

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

March 31, 2003 - 12:38 pm

Hi Nathan

I think St George has the solution your looking for. It’s offering a special with it’s professional package. Based on your loan size they will offer you 0.60% off the standard rate for the life of the loan. The other features are:
– $300 application fee.
– $5 monthly fee.
– 100% offset.
– Redraw (min $2,000, cost = $25).
– Early repayment fee of $1,000 for 3 years.

The 3 year AAPR for this product is 6.01% whereas the 3 year AAPR for the other product is 6.16%. The reason I calculated the AAPR over 3 years is to ensure you maintain your flexibility.

If you would like more information about this loan or if you would like a free report about how to choose the best loan for you then please visit http://www.prosolution.com.au.

I hope this helps.

Regards

Stuart []