these sorts of places are very hard to get finance too and this will hinder resales and effect values. I would not consider one of these deals myself.

Terryw
Discover Home Loans
North Sydney
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House values can very quiet a bit, so who are they to say how much it is worth. Why don’t you consider getting two valuations done. Tell the valuers the purpsoe of the valuation and ask them to make it as low as possible, and then use this to justify the sale price.

5% is still a good yield, there may be good capital growth in years to come, so it may not be a bad deal at all.

Terryw
Discover Home Loans
North Sydney
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Sounds like you might be with GE on their 90% low doc. Since you have only recently settled, there may not have been much growth, so it may be difficult to refinance on a low doc basis as you will only get 80% of value.

But being such a high rate, it could work out cheaper if you withdrew some money from a few credit cards and use these funds to reduce your loan and then get an 80% lvr low doc loan around 7%.

To help with the refinance, make sure all your repayments are on time. There will also probably be high exit fees for your existing loan, so factor these into your calculations.

Terryw
Discover Home Loans
North Sydney
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Kay

Thank you for those links. I actually did this course about 3 years ago and paid about $5000. Luckily I obtained a refund – only after many letters and complaints.

Terryw
Discover Home Loans
North Sydney
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There are a few people around that promote a similar strategy. it will work as long as you are not borrowing more than your portfolio is growing each year-say no more than 80% of growth. It is not a bad strategy, but very risky.

There are also lenders out there that will lend to you based soley on the security value. So as long as you have equity, you can continue to get finance.

Terryw
Discover Home Loans
North Sydney
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hi Mike

There may be different tax implications depending on when your mum actually purchased the property too. It would be best to speak to a a lawyer who specialises in this area.

Terryw
Discover Home Loans
North Sydney
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Mano

I am no expert, but have done 3 LOs. What do you want to know?

Terryw
Discover Home Loans
North Sydney
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LifeX, good luck and let us know how you go. I hope your LVR is less than 80% as it will be much easier.

As for loans being called in, there is a rumour going around that one of the major banks recently called in the loans for a certain big wrapper. He had to refinance about 40 loans in a hurry.

Terryw
Discover Home Loans
North Sydney
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Randallc

I am not familiar with Rick’s LO style, but if it would normally rent for $330 pw and you want to charge $475, this is $145 pw extra in rent, but you only give a $25 pw credit. So it seems very expensive to me. Plus the option fee and renewal fee.

This may be compensated by the high growth (projected) in the property.

It sounds good from your point of view, but may be hard to find someone to accept this deal.

Terryw
Discover Home Loans
North Sydney
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Bnr

Sure. There are various ways you can structure it, but check with your solicitor first.

Terryw
Discover Home Loans
North Sydney
[email protected]