Novo

nearly all lenders lend up to 90 or 95%.

The risk fee you were asked to pay would be similar to LMI which most banks would charge you if you borrow over 80% LVR, so this is not too bad. The exit fees are fairly higher though.

Terryw
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I think you could do this yourself by just letting the interest capitalise or by setting up another LOC and using that to pay the interest, or part of it – maybe the shortfall.

Terryw
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Selling one would be one option, but if you don’t want to, then,,
You could set up a LOC on your home, use this to pay for the shortfall each month. This is basically what the investors direct loan does anyway.

Your LVRs are fairly low so your position is not too bad.

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I think that it common. It you do the inspections before signing, then they could sell to someone else in the meantime – leaving you out of pocket.

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That would possibly get you into the market quicker. But you would have much higher repayments, so you would need more growth/rent to cover it. You have to work out if you think this is worthwhile. Also consider the effect of a personal loan on your home loan application. will you still be able to qualify? Personal loans have higher rates and shorter periods, making the monthly repayments high – this can hurt serviceability.

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I’ve had many clients that have been knocked back by their own banks, and then I have gotten them a loan with the same bank. Got one at the moment with St G. He went to his location branch and they said no. But he is settling with St G thru me next week. I don’t know why this happens, but it happens a lot.

The same with brokers. Each broker has different levels of experience. Some don’t invest themselves, others are just ignorant of certain products or policies. There are various software packages out there, but they do not help in these sorts of situations. Experience helps a lot in knowing where to place a loan.

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You would be liable for tax on the full gain contract price – $100,000 in your eg. But if you had more than 12 months between buying and selling (contract dates) you would be able to claim the 50% reduction, so would only have to pay tax on $50,000.

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I am away at the moment, but from memory, ING can do low docs without the 2 year ABN requirement. Another is possibly Adelaide Bank.

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CT, has been done by many. As long as all valuations stack up, the ATO is not missing out – well maybe by a little bit!

I suppose they could argue that it is a scheme designed to minimise tax, and they may have a point – div 4a. But tax is not the only reason, there are asset protection issues and estate planning issues as well.

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I think you would possibly be able to claim the first 6 years of it being rented as still being your PPOR (if you didn’t claim another). So the CGT would be the sale price less value at this time.

eg if worth $400,000 at year 6, then sold for $550,000 at year 10 = a profit of $150,000. Less costs of say $50,000 = $100,000.

Depending on the entity holding, you may get the 50% discount = $50,000 taxable capital gain.

This is what would be added to your income, assuming held in your own name by yourself only. You would pay a max of $25,000 in tax.

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