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

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

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

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

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

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 []

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 []

You guys are a tough crowd!!!

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. []

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 []