Like any lender Firstmac has pros and cons – so its really dependent on whether they will suit the investor. Their rates are good and they do non genuine savings to 90% (like a few more lenders) but their servicing is very conservative. 

Regards

Shahin

I wouldn't buy a studio regardless of the cashflow as the CG is statistically poor. What's the point of purchasing an IP that will not return you the CG?

That aside – there are LVR restrictions with that sized studio so there is a certain amount that lenders will go (depending on the lender). 

Also re your employment – is this something that is going to change or is the plan to stay unemployed?

Regards

Shahin

Ok here is the thing – telco default are much better than financial institution defaults. Amount is also ok.

LVR is where you need to focus on. Under 80% you will have no issue with most lenders.

I assume that you cannot go to 80% and it must be at 90%. Firstly it needs to be under 90% so that's 89.90% plus LMI. There is no way you can go over 90% with a normal bank. 

At an LVR of 89.90% you need to ensure the application is strong. By this I mean employment, address history, servicing, assets, liabilities, and all possible details (bank accounts, etc).

You need to provide a proper stat dec explanation of the default – i.e. why it happen, why it took you so long to pay (e.g. I didn't know it was outstanding until I had applied for finance in which I paid it straight away), receipt of payment (although it should say paid on the credit file). 

Also please do not apply to any more lenders unless you know that the application is ready to go and its going to get approved. Further hits on your credit file will hurt you. 

Regards

Shahin

It depends on a number of things – what is the:

1. LVR

2. Telco default amount

3. When did it happen and when was it paid

Regards

Shahin

Your credit file doesn't state that the loan has been declined or approved. 

However most banks have computer credit scoring engines. This is a complex formula that not even the lender's credit team can explain to you. There are many many things that the formula (for a lack of a better word) takes into consideration and weighs up. Obviously high LVR's, short employment, regular changes in employment, tight servicing, defaults etc all negatively affect the scoring. The other thing that affects the credit scoring is several and recent hits on your credit file. 

No back to the point – if your LVR is as 95% then please don't submit an application unless you are 150% sure that it is going to be approved also go with a lender that has their own DUA. 

Regards

Shahin

Getting the loan at 95% is not an issue per se as long as you tick a lot of boxes so it really depends on the situation.

The concerning thing with the above comment is re the 'it probably won't go through because the lender won't lend that much'. You should be able to know whether you can service the loan or not prior to submission.

The last thing you want at a 95% lend is hits on your credit file. This affects the approval of an application more than people think.

Regards

Shahin

How much is the purchase price for the 4th IP? What is the value of IP3? What is the amount owing on IP3?

Regards

Shahin

When we do cashflow analysis we take into consideration the following:

1. Strata (if its a unit)

2. Building Insurance (if its a house)

3. Interest payable on the loan including annualised fees 

4. Property Management Fees

5. Water Rates (if its a unit)

6. Council Rates

We don't take into consideration:

1. Drop or increase in interest rates

2. Depreciation

3. Negative gearing

4. Vacancy periods

5. General Maintenance/Repairs

We also take into consideration the whole purchase price (minus any grants) when calculating the loan repayments instead of just the loan itself.

Regards

Shahin

Set them up as separate individual standalone facilities. For example, PPOR value is $500,000 and current loan is $280,000 against the PPOR. You want to use $120k equity to purchase your IP worth $500,000 plus $20k in costs as well. You will take out a loan against the IP for $400k. The balance will come from the equity of $120k.

Therefore you will have 3 loan accounts. Loan Account "A" in the amount of $280k against the PPOR – purpose of loan is PPOR. Second Loan Account "B" in the amount of $120k also against the PPOR – purpose of loan is IP. Then the third Loan Account "C" in the amount of $400k held against the IP you are purchasing – purpose of the loan is IP.

Note numbers are round figures but hopefully should paint the picture for you.

Regards

Shahin

If you have a builder's license and are in the property game – then it carries massive advantages. 

Regards

Shahin