Wild

I wouldn’t beleive anything a real estate agent says.

Your broker should be able to tell you how much you can borrow.

If you get your subject to finance clause worded correctly, its water tight. Worded incorrectly could cost your dearly.

Terryw
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Hi Maveric

As the courses do not relate to current income, I beleive they are probably not deductible. Check with an accountant.

Terryw
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Fullout

Yes you can do that, banks will lend you the money as a LOC. I don’t know what they would think if you told them it was for living expenses tho! Most just say for ‘investment purposes’.

When buying a property banks insist on a valuation to protect themselves. I could sell you a $100,000 property for $200,000, and if the bank lent you $150,000 and you defaulted they would oly have an asset worth $100,000. ie $50,000 shortfall.

Some banks will not do a valuation if it is under 80% LVR and under a certain amount. Otherwise a valuation is usually conducted,

Terryw
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Watch out for getting credit cards as they appear on your CRAA. Most banks when assessing serviceability assume that 3% of the limit is outstanding each month. This can really eat into your serviceability!

Here’s a tip. Start off with a low limit. then get credit increases as these will not appear on the CRAA. Any card held more than 5 years also will not appear.

Terryw
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Trying

Yes, I beleive Steve Navra has applied for a tax ruling so that the ‘loss’ is claimable. But it is still a loss, and then there is Navra’s fee as well. I am not sure what it is, but have heard around 3% of the bond! Maybe a Low doc is easier and cheaper?

Scott

You property sounds excellent. I agree, if you can find these sorts, it solves a lot of problems.

Terryw
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There are private lenders that do not check your CRAA at all. They don’t even care about it. They lend purely on the valuation. BUT (and that’s a big BUT) the interest rates are around 12%.

So if you are willing to pay for it and can still come up with the deposits, you can get unlimited finance!

Terryw
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Trying

You could use a cashbond to help you service the loan, but this is just like borrowing to pay the interest repayments. It is not nessecarily a bad idea, as long as your property is growing faster than you are using the equity.

Really there is only one way to service your loan, and that is to earn more income. This can come from a wage or from rent from other cashflow +ve properties etc.

And the average bank would not lend you money based soley on the rent if you had no other income. You would be what they term too rental reliant.

Terryw
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Yes I think this is a very good strategy. It is far better to withdraw some equity to live on then to sell a property. Once you have sold the property it can’t grow any more (for you anyway).

If you have $1,000,000 worth of property grwoing at 5% per year = $50,000 pa growth. If you just take, say, 80% of this growth and leave a buffer, you should be right, as next year it will have grown another $50K or so.

You can still borrow without an income using low doc loans, or asset lends.

Terryw
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Skyeboy

You will lose any further capital growth by selling an option on your house or buy wrapping it.

You could make some money by doing Mezzanine finance. Maybe a better option is to use the equity to buy another property which you could wrap?

Terryw
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That is what I do. I have an agent in Vic that sources property for me. He doesn’t have a web address tho. I better not give out his phone numbers on this forum without his permission. you can email me if you like and I will pass your details on.

Terryw
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