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  • Profile photo of TheNewGuyTheNewGuy
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    @thenewguy
    Join Date: 2014
    Post Count: 151
    January 3, 2014 - 7:09 am

    Hi all,

    Thanks again for all the comments and help. I've had the meeting with the bank and this is what I've found out / started.

    • There is no security across the two properties. Excellent.

    • I'm turning the IP loans into IO.

    • I'm going to get a Line of Credit on the PPOR, but it needs a valuation, so I've started that. I can't get the LOC over 80% of the property value without further LMI.

    • I can get a loan for a $350k property. Depending on how much the LOC is will really determine how I go about getting this loan, in relation to LMI / free cash etc.

    • FYI. On a $350k loan. 90% loan, LMI ~ $5800. 88%, LMI ~ $4000. 85%, LMI ~ $2100

    So, I guess I'm going to have to start looking more seriously for a new property.

    Profile photo of TheNewGuyTheNewGuy
    Participant
    @thenewguy
    Join Date: 2014
    Post Count: 151
    January 2, 2014 - 9:28 am

    Ok. I’ve got it. I’ll bring it up tomorrow. Thanks.

    Profile photo of TheNewGuyTheNewGuy
    Participant
    @thenewguy
    Join Date: 2014
    Post Count: 151
    January 2, 2014 - 9:10 am

    I’m looking at about $350k in qld.

    Profile photo of TheNewGuyTheNewGuy
    Participant
    @thenewguy
    Join Date: 2014
    Post Count: 151
    January 2, 2014 - 7:11 am

    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.

    Profile photo of TheNewGuyTheNewGuy
    Participant
    @thenewguy
    Join Date: 2014
    Post Count: 151
    January 2, 2014 - 6:52 am

    Hi all,

    Thanks for all your replies. I'll let my wife know that no one recommended that we continue travelling :)

    To answer some of your questions and add a few comments:

    • I have organised a meeting with the bank tomorrow. First off the list is to change IP loan to interest only.

    • I will chat about a sub-loan / line of credit. That sounds like a good safety net if required.

    • I'm not too keen on using the equity in any existing properties as that will cross collateralise all my properties in some weird triangle mess. So, I'm also going to discuss the 88%-90% LVR loans and costs.

    • With super, the vast majority of my super is in the PSS – which is a defined benefit fund from the Commonwealth Public Service. I am pretty happy to leave it there, but it's worth considering for my private sector super.

    The other benefit of doing a stand alone loan is it won't lock me into the same vendor. At the moment I'm with NAB, who aren't bad, but I have a loan under DHOAS with them and their very good for those loans. Now I have the ability to go with any vendor and at least provide some incentive for NAB to come to the party.

    So, in general I'm thinking:

    • Investment property ~ $350k. 90% LVR. $10k for stamp duty and $5k for other expenses. If I get a line of credit then that should make this relatively safe. Otherwise, I can save up $10k-$20k relatively quick, possibly before I would even settle on a property since I haven't started looking in anger yet.

    Let me know if I'm off track, or you have any other ideas. Meeting with the NAB tomorrow.

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