Forum Replies Created
ATO assumes two parties borrow 50/50. Your wife then lends you (50%) the money to invest in property. She charges you interest (@ bank rate) which is assessable income. She gets charged interest by the bank which is an allowable deduction. The assessable income = allowable deduction and therefore is doesn’t affect her situation. You are entitled to a deduction for the interest you paid your wife.
To look through this structure the ATO relies upon names on title (when applicants are related) & names on loan become irrelevant.
I am a Chartered Accountant but this is not advice (just info) so see your accountant.
Cheers
Stu
Agreed. You are unlikely to get a MI waiver at this level. NAB has one of the cheapest MI costs so that’s good. Make sure they offer you a good rate. 0.70% discount if you are borrowing over $250k. 0.50% is their standard discount.
AMP will give you 0.65% (no fees) if your are ICAA, CPA or NIA member.
Cheers
Stu
I agree with all the comments above about seeing a broker…
I find HSBC is commonly the lender that has the highest borrowing capacity for property investors.
Cheers
Stu
They can be done and we have helped a client with this before (commercial loan). Max LVR is normally 60% to 65%. Net rental income needs to be at least 1.5 time interest only repayments. Commercial lenders probably wouldn’t consider it for loans less than $1m.
The main uses of these facilities are listed/unlisted property trusts.
Cheers
Stu
Why offer such a large discount when you don’t have to – no other lender is.
St George – 0.70% > $250k
Westpac – 0.70% > $250k
CBA – 0.70% > $750k
BankWest – 0.75% > $750kSo why offer 0.82% if no one else is. All you need to offer is 0.75% to beat everyone else.
Salubrious, is there something we’re missing?
Cheers
Stu
Isn’t this great??? See what competition the mortgage broking broking industry is creating?
I must admit… 0.82% interest rate discount for a LOC > $250k is the best deal I have seen. Does the discount exist for the life of the loan? Did the client have other borrowings with HomeSide?
Cheers
Stu
If an established lender was offering the product I would have more confidence (even if they missed launch dates, etc.). But here we have an unknown company and an unproven product. The two together equals problems to me. I certainly wouldn’t jump on board until one is proven.
My second point was more aimed at encouraging people to do more due diligence with new lenders, service providers, anyone. It’s not as simple as saying “I have no downside” if you don’t fully understand the model (once again, especially with an unknown company).
You need an open mind. But a healthy dose of scepticism is also very handy.
Cheers
Stu
I didn’t lock the past topic but…
Sometimes it’s best not to respond Robert.
I can’t see any benefit in leaving this tread open.
Cheers
Stu
Yep, the journalist does seem to know what he’s writing about. There aren’t experts in the loan arena. That’s why I like it when industry people write the articles… different insight.
Cheers
Stu
Yep, they should be able to vary the original mortgage insurance contact as long as the loan isn’t too old. It’s probably an oversight.
Cheers
Stu
The use of the word “creative” makes me nervous.
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Stu
Many fixed rate loans don’t allow redraw. However, there are a few lenders that will allow redraw and a small amount that will give you an offset account with a fixed rate.
Cheers
Stu
You shouldn’t have a problem with this. If the lenders aren’t happy without an occ. certificate then they can do it as a construction loan. Otherwise a normal loan will do.
I would suggest BankWest Lite Invt Loan. Min loan = $60k. $500 app fee (refunded in 3rd year), rate is 6.65%, no break or ongoing fees.
Cheers
Stu
Means proportion of property’s value you need to borrow. E.g. $200,000 purchase price with a loan of $160,000 = 80% LVR (deposit is therefore $40,000 plus costs).
Cheers
Stu
That depends on many factors, including:
Loan amount
State the property is located in.
IO or P&I.
Loans required (# of accounts/splits).Maybe provide us with more info or contact a broker.
Cheers
Stu
Yes they have discounted professional package rates. Problems with product are:
1. Everything is cross-securitised.
2. They charge valuation fees. I have a client that has 4 properties and just purchased a holiday home. It will cost him > $1,000 in fees to add one loan.Other professional packages are better.
Cheers
Stu
80% LVR is probably ok but over 80% will probably be hard.
Cheers
Stu
The lender is concerned with how you will reduce your debt exposure (forget about logic here – they assess loans without any consideration about what happens in the real world). Therefore, you need to appease this concern. Present them with an “exit strategy”. For example, say to them that you purposely want to retain debt (for tax purposes) and you plan is to hold onto the property. Tell them that if you ever got into trouble with making the repayments that you would sell one of the properties. Similarly, if you struggled on the income side of things you could sell some properties to pay out the debt. If you have a few investment properties then they should be more comfortable.
If they won’t budge then you will have to try another lender.
Cheers
Stu
St George will do 100% & no genuine savings. Servicebility and employment have to be strong so maybe you’ll fall down there.
Cheers
Stu
I don’t think so but who knows.
In my opinion, the amount of money lenders allow people to borrow is high enough.
What needs to change is the standard mortgage insurance policies. For example, you can borrow 95% up to a max loan of $500k. This needs to be increased to $750k (or higher) in Melb & Syd. You can’t buy much in Melb & Syd for $500k in suburbs close to the city. I can see this changing.
Cheers
Stu
