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What is the bank link system?
Terryw
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There are lenders that will lend on commercial security based on the rent for serviceability. It is like a semi low doc, as long as the rent is above a certain yield – about 11% I think, then they will lend. Also, location has to be good etc.
But as the others have said, you will need a deposit of around 35% or use one of you other properties as additional security.
Terryw
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One major factor with securitised lenders is virtually all are mortgage insured – no matter what the LVR is.
This is important to note when you have a few properties, as the two mortgage insurers have limits on the amount of loans they will insure for any one person.
Terryw
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Many lenders will accept a personal loan as deposit. You just have be able to service both loans.
Terryw
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as your not working, a trust would probaby help you save tax. talk to an accountant.
Terryw
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Of course, it is hard to do, but many people are doing this with stuff purchased off the plan. Property has gone up, so instead of settling, they just sell and take a profit.
Terryw
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[thumbsup2]
Terryw
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Patw
Could you please explain what you mean by ‘seasoned’?
Terryw
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There is no magical loan that saves you heaps of interest. It mostly comes down to paying as quickly and as much as possible. You have to get the daily balance as low as posisble, so the interested added is reduced. You can do this by a LOC, standard variable or IO with a 100% offset account.
Terryw
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Remember try not to beleive everything an agent says. Negotiate hard, and don’t let them call the shots. beware 20 days is a quick settlement, and if you are using a major bank, they may not be able to settle in time.
Terryw
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And don’t forget you will have to list an income with the low doc loans. They may also want to talk to your accountant to confirm.
Terryw
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And don’t forget to keep saving your cash as you can plough this into your homeloan, gaining equity faster or, if an IP, put all of your cash into a 100% offset account, save interest, and then withdraw and use as a deposit on the next property.
Terryw
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Yes you could increase your loan or refinance and include the car up to 90% LVR. but, LMI would be payable. – maybe around $2000.
I agree, car loans kill serviceability, so getting rid of it would be a wise move. can you pay it out in cash?
Terryw
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There’s not much to them. Just agree on a rent and a price, and how long you want the option for. go to a solicitor and he will draw up an option.
eg. place is worth say $200,000. You agree with buy it for $240,000 within 5 years. normal rent is $200pw, but you agree t pay $300 per week and will do all repairs etc. You pay her $4000 for the option fee – which can be non refundable, and come off the purchase price.
After 3 years, it may be worth $260,000. You can then get a loan and pay her out paying only $236,000 (since you paid a $4000 option). in 5 years, it may be worth $300,000, but you will still only pay $236,000.
You should be able to get a loan based on value, eg. 80% of $300,000 = $240,000 just what you need.
She gets a small capital gain and extra rent, you get instant equity, and your back in business.
But since you are family, may you don’t need to go thru a solicitor to do all this, but then again, maybe you should incase there are disagreements.
Terryw
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I dunno about the moving out of your PPOR bit. If it is going to be cashflow positve, that means you will be paying extra tax where otherwise you wouldn’t. This doesn’t really make sense, unless, maybe, you will be downgrading and moving into a very cheap place.
Also factor in holding costs on your renovation. It might grow $40,000 in 6 months, but this might cost you $20,000 in interest. If paying cash, you need to think about the opportunity cost. You could be investing your money elsewhere.
Other than that I think it is a good idea. There may not be immediate increases in all markets, but in the long term adding value to quality property is a good strategy.
Terryw
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it would be once you move out.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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I beleive customs will hold your goods until the duty is paid. The duty varies depending on the type of good imported (and maybe the country of origin). There is a number you can ring so ask – it is on the customs web site. AS far as I know, you can pay by all the usually methods. transfer, deposit, cc etc and you don’t need any permits if importing general items. Some items such as food, wood prodcuts etc may need some sort of permit.
I don’t know if an accountant would be able to help you with much. There are some Aussie books, and cheap courses available on importing. There are also various trade fairs happening in China all the time, one in Guangzhou recently.
Terryw
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You would get it at settlement if processed thru a lender. If on your own, it would be just after usually.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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It wouldn’t really make your unit negative again. Any future borrowings would be for the new property and/or car, so any interest payments should be attributed to these. I suggest you leave the car out of it as it will get messy at tax time. (and cars are depreciating assets so should not be purchased on borrowed money). If you have cash like you say, use this to buy the car and borrow 100% + costs for the new house.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Amused. Your not sure of the legality? Don’t worry, it is perfectly legal. Afterall, you are just onselling a house on the day you settle. You will pay stamp duty on your purchase and the new purchaser will also pay stamp duty. There are ways to avoid this legally, talk to your solicitor about this. You will have to pay tax, but this can be minised legally by using trusts etc.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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