Rate is good. Can you do better? Yes. Should you move because you can get a better rate? No.

But you should consider moving if another lender gives you the same deal or better deal plus and more importantly a stronger valuation (in turn more equity).

I guess the question is why pay LMI if you don't need to?

TheNewGuy wrote:
Thanks. Can you provide a bit more detail about how I can go less than 90% by using equity? I'm using total loan / total value and getting around 80% (832/1045), so I assumed that I couldn't go any higher, is this not the case?

I'll remember to aim for 88%, in fact I'll ask for a LMI cost for both just to be sure.

What is…[Read more]

Most people will have a PPOR Loan and one or more investment loans. PPOR loan is not tax deductible and IP loan/s are SO you want to keep the PPOR Loan as low as possible (without paying down the principle in case you are going to convert it to an IP in the future) and you want to keep the IP loan/s as high as possible.

Most lenders provide free…[Read more]

Is there a reason why you are with ANZ? Did you previously pay LMI with them?

Yes but thats a medi product so not applicable to us mere mortals. 

You do not need to cross securitise your properties in order to access equity. You just need to set them up as separate. It is more likely that the lender will recommend that you cross securitise your properties (in order to make it harder for you to leave the bank) but tell him/her that you want the properties to be standalone.

Is there a reason…[Read more]

2 ways of borrowing 105%.

One way is to access the 25% equity of your current property (assuming you have that equity) and 80% of the new purchase or say 10% equity against your current property and 95% against the new property. You just need to make sure the loans are seperate in this scenario.

Second way is to go with the Adelaide Bank product…[Read more]

Get your broker to order some upfront valuations (different valuers and different ypes of valuations – i.e. kerbside, full valuation and modelled estimates). You may access the equity you need and not need to go to 90% and pay LMI.

Re the equity releases – how you actually do it will somewhat depend on the lender (and their limitations). I would…[Read more]

Dont change it when you convert it – change it now and dont reduce the principle any further. Create the offset and park your principle payments in there.

Different lenders will lend different amounts – $435k still seems very low so I think it hasnt been structured correctly to utilise a higher borrowing capacity. 

Is it a new dwelling and did you claim the FHOG?

If its NAB then you shouldnt have any dramas switching to an IO. 

Hi Mate,

I would consider changing your PPOR loan from principle and interest to interest only. There is a active thread about this:

https://www.propertyinvesting.com/forums/help-needed/4349432

If you are going to convert the townhouse into an IP then YOU DO NOT want to pay the loan down because you will reduce the amount you can negatively…[Read more]

…..and don't forget to set up the offset.

Which bank is it?

If you are going to convert the current PPOR to an IP then you definitely want to call the bank tomorrow and convert to IO and set up the offset. Also consider upfront valuations to see if you can avoid LMI for the time being. 

And no to your last comment – you do not need to pay a lump sum. After the IO period (aim for maximum period) you will…[Read more]

Can't comment on how long you should hold the property but I like to keep property and sell only when I need to money for a better project/opportunity. This is because entry and exit costs associated with property here is quite high. 

Going interest only allows you to have the money liquid in case you get a crappy valuation and cannot access the…[Read more]

LMI is not a bad thing depending a a number of things (loan size, risk tolerance, etc). For me personally, its the cost of doing business. 

I would personally convert all loans to interest only and create a "superman" offset account against the PPOR loan. Have all income traffic (i.e. salary, rent, bonus, etc) going into this account since it is…[Read more]

Ok so let's say you pay your loan down and becomes zero. When you go to convert the property into an IP and you want to negative gear – then the amount that you can negative gear is $0. Whereas if you kept the loan as interest only as did not pay the loan down then you can obivously claim the higher amount when you convert the property to an…[Read more]

Easy.

Don't pay Principle and Interest – instead go for interest only and accumulate savings + principle repayments in the offset. Keep the principle of the loan as high as possible. Then after a period of time you can convert the unit into an IP, claim the maximum principle amount and use the funds you have accumulated in the offset to upgrade…[Read more]

What's the actual question?

Not many lenders will accept 6 units in a single title. There are only 2 that will accept it. Your biggest issue with be valuation so you need to address this upfront as much as possible.

Are each of the units fully self contained?