Forum Replies Created
- Hopeful1 wrote:Hi crj
Before I answer, thanks to Kylie for your advice and suggestions.
Of course Yossarian I have taken the advice on board. That is why I started this in the first place. I wanted advice not criticism.
Does anybody get themselves into this position by choice?
We have found ourselves at this point, because we trusted a broker who promised everything and ended up doing nothing and still to this day has not said that it couldn't be done. He just stopped answering my calls. So, because we are naive, we let it go almost to the point of no return by trusting him, and now we want to finish what we started and not let him ruin it all for us. We were never supposed to be in this situation, but our loans have blown out because he didn't get what we asked for and there were so many delays and extra costs involved that has brought us to now.Probably what I was hoping for from this forum, was that one of the brokers on here would have said that they knew of a loan, at not too high interest, that would enable us to get higher than 80% low or no doc that would give us a buffer for the time that we would move out of our house and then establish it to holiday rent – and finally we would earn some income over the coming holiday period. That problem solved. Then we could move ahead without all this pressure.
But now I know its not that easy.
Our current situation is that
1. My husband is working casually. It is helping us to catch up on bills but is not recognized by banks for 12 months
2. We are in the process of applying for a low interest credit card
3. We will apply for a business loan – which is very involved as there is so much information needed to prepare financial plans etc which I have no knowledge of at this stage
3. We want to move out and rent – but can't yet because we have no money for a bond. So we have to wait.We have thought about renting this unfurnished too. But that won't cover the mortgage etc. Holiday rental is the way to go in our situation.
At the end of the day though, any way that we can keep this house is a good way!
There is one thing I have thought of after reading other posts – can we start an SMSF and sell half of our house to it? I have read that you must be arms length and we wouldn't be living in it others would be renting it, and if we get the business loan (hubby has had ABN more than 2 years) it would be business premises? I'm not sure about that so is anyone can tell me more, that would be great.
So at this point we are still hangin' in there, but only just!
Still Hopeful1
You are trying to borrow your way out of trouble without genuinely asking yourself how you got there.
Hint : It's not your mortgage broker.
volitans wrote:OK, its been a while but here is an update on MY dealings with Lifecorp – THIS NOT A RECOMMENDATION JUST MY OPINIONS AND A FACTUAL ACCOUNT OF WHAT HAS HAPPENED.2 days ago I settled on a property shown to me by Lifecorp. EVERYTHING they have spoken of has rung true though I am yet to receive the cashback (that many devlopers offer the public) that Lifecorp negotiated. It's only been 2 days now.
The figures that Lifecorp provided me more than stack up. They were conservative and I now have a cashflow positive property with repays of $315pw and rental income of $340pw before any deductions.*snip*
Perhaps it's just me, but I suspect 2 days may be too short a timeframe to assess the Lifecorp proposition.
mrstinky wrote:Thanks Richard….
I have capital resources & property equity and can service potential future borrowings with potential rental earnings.. problem is acquiring upfront outlay to purchase.. without a (current) established income. I've read of someone in these forums being able to borrow utilizing only their assests as security without income being part of the equasion?? Would possibly be through non traditional aussie lenders perhaps?? this is what i'm trying to find out!In summary, no you can't service the debt but wish to incur the debt in the hope rent will cover it.
Hopeful1 wrote:Thankyou for that suggestion Erik and also for the encouraging comments about giving it a go. How easy is it to get a private loan and what sort of interest and payback time would we be looking at?Most people here seem to think that we just want to borrow money to pay debt. That isn't really what we want to do, we are in the situation where one property will be making a lot more than the mortgage on it and will definitely be paying for itself with money to spare. Isn't that what the majority of property investors is aiming for – positive gearing?
We want to do the same thing with the house we live in at present, but our problem is that we don't have enough 'startup' money ie to furnish and establish the house as a holiday rental. Once that is done and its renting, in not too long, the money that we need at present would be paid back and we'd be making money. Spending money to make money. Isn't that the whole making money out of real estate theory? Aren't there people on here who, in the past have scrimped and borrowed and 'got into debt' to put down a deposit on that 'must have because its such a good buy' property? And in times past, I'm sure there would be people here who have borrowed 100% or even 110% to buy a property, when it was possible.
Now why are most of the comments directed towards me negative? Get a job, earn some money, sell while you can, get out quick.
What I'm really asking of anyone here, is how do we get between 10 and 30k to enable us to do what we want to do? Private money? Is the Westpac low doc 82% still possible? I think all the interest we owe will be capitalized and therefore would not be viewed as unpaid payments – is that right? Are there any lenders around who will lend between 82 and 85%LVR on a low doc? Should or could we get a visa or a personal loan? Or would the Private money be easiest and best?
I am just trying really hard hot to let go without having given it my best shot. Do you all really think, we should give up the CG's that a house valued at 650k now, can give us in the future, and just sell it – all because we can't come up with, what is, in the big picture really, peanuts, to furnish and establish it as a holiday rental, that will make us money.
You wanted advice and you've received some. You are obviously free to ignore it.
If you were looking for people to make reassuring noises about (a) the desirabilty and (b) likelihood of obtaining further credit you cannot support on your current income you should have been more specific.
Your strategy appears to have been based on the assumption that you cold access equity (create further debt) to meet your commitments.
Your bank is giving you temporary relief to allow time to prove your can service the loan from income.
Using debt to service debt, in spite of the advice of the books and the spruikers, is not a sustainable model.
You need to find work and generate income to service the debts. If this is not possible where you are and you aren't in a position to move, you shold give very serious consideration to selling a property before the bank does it for you which, if you can't showing a reasonable prospect of servicing, they surely will.
Michael,
Context best before making the statement rather than afterwards
BTW and as a suggestion, unless you are associated with the The Mortgage Detective and/or other businesses with a smilar name, might be wise to use something else as your handle
duckster wrote:However you should not purchase an investment property based on a tax deduction.Ne'er a truer word was said.
michael k2 wrote:*snip* Depending upon your own personal situation, a LowDoc lending option could possibly provide you with the finance you require. Of course certain requirements are needed in order to obtain LowDoc finance.
Regards.…an income, for example.
mortgagedetective wrote:*snip*
As an investor, interest is a tax deductible expense, which means that money in an offset account reduces your tax deductions, which for most people, is not the name of the game and this is especially true if you have an interest charging personal debt.*snip*
I'm not sure i agree with any strategy that promotes spending a dollar to earn 50 cents. Unless the money that could be offsetting the interest bill is at work earning a return elsewhere, why pay more interest (and, therefore, reduce your yield) than you have to?Hell, why not do *even better* and increase your deductions by offering to pay your lender a higher interest rate!
By salary sacrificing, you didn't pay tax on the expense, therefore there is no tax to claim back.
As above plus it is reasonable for the insurer to want to make sure the house is "complete" when construction is finished and a house without front landscaping, aircon or window dressing aint finished or, therefore, easily sold.
It is what it is.
Fixed rate swaps for > 3 year terms have been gently trending up for a couple of months so it is unlikely you will see any material reduction in fixed rates absent the economy going so far down the toilet the RBA panics.
It's called a "variable" rate for a reason.
Terryw wrote:i personally wouldn't even consider them. Low capital growth, hard to sell and hard to finance.What Terry said. Finance can be *very* difficult.
The number of credit inquiries – in conjunction with other data – is a good predictor of poor loan performance and banks generally count it as a negative.
bfantastic wrote:Anything over 80% will incur LMI, when they are involved they want to see where the deposit money is coming from and want to see records of genuine savings. you can pay up to $10,000 for high end LVR loans over 95%. the old Rams were good for this as they were able to over come the LMI problem by providing in in house Mortgage insurer but now they have lost that facility they have to conform with genworth and PMI conditions that means no more 100% loans and this is the same with Guaranttee loans the terms and conditions placed on these loans by LMI make it near impostable to get through.OK what are your options?
looking at property value between $370K – $380K
Income – $80K before tax.
No deposit
Good work historyAssuming
PAYG
clear credit.
single no dependents
borrow capicity at todays rate $500k
Retired patents with unencumbered property.Scenario
Patents take out a lo doc investment loan LVR <60% purpose of the loan is for future investment
Borrowing amount to fund 20% deposit. at such a low risk, LMI is not involved and bank will ask no questions as long as they get an account with a direct debit set up for the monthly payments. this can be in anyone name as long as the payment is made the bank won't care. There are still lender offering these type of loans. It is far easier than setting up a reverse mortgage.Now you have your deposit you can purchase your property and set up an 80% loan basic mortgageand pay no LIM.
If all parties are in agreement you will have your home and quite easily be able to pay for both loan no questions asked, simple process when you take out LMI.
think outside the box
Cheers
All good other than the committing fraud bit.
ientrep wrote:Honestly, there is nothing wrong with the direct selling industry overall – unless:
– you join at the bottom of the chain and there are 1000s and 1000s of people above you, and,
– your uplines lie – about their status and about the business in general
– you do not learn about the actual marketing and business side of it, which is the whole point
– the product/services are INDEED at wholesale price, are necessities, and continuously used,
preferrably not much competition.If you are in Australia, there is a telecommunication direct selling company called 'Our Mobile'
that is about to launch, here is the URL for a free VIP registration to its launch sometime in April,
Melbourne (and later in the year there will be an Australia-wide tour)
http://ourmobile.wealthchemistry.com/ourmobile-VIP-registration.htmlI saw their brochure and test-used their services, their mobile rates are the cheapest and you get
to design your own mobile plan, which is very flexible… below is what I copied and pasted from
an email that the company's CEO assistant sent to me… funny how I prospected the company
CEO a long while ago, and since then we became friends, and he has been updating me with
lots of the company's movement. I think this business is hell lot easier than Amway or Network
21, you just have to ask people what plan they are on and talk about what you have, rather than
pitching people about so-called 'income opportunities'anyway here is a section of his email:
– the company is backed up by research and development in new technologies, including modems
with technology that's never seen in Australian market.– not only can you save heaps on your mobile bills, but you can also save on your other necessities
such as fuel and shopping. Details to be released at the launch.– The founder and CEO of 'Our Mobile' has a vision that their services and infrastructure will integrate
mobile technology and our life, hence there are many major add-ons to the company in the future.– Upon request and approval, you can brand the product(s) under your business name, hence it is
pure direct selling, unless if you just want to use the services yourself.– Joining before May means you will position yourself at the very top of the bonus structure, before
the company expands throughout Australia and Asia pacific.http://ourmobile.wealthchemistry.com/ourmobile-VIP-registration.html
I think he also told me there will be free food and drinks there at the event too.
Come and I will tell you how it is relevant to real estate properties.
all the best,
Michael
Thank you for taking the time to share what I have little doubt is genuinely a mind-snappingly great business model, involving genuinely competitive products and services and simply another MLM sucker-bet.
I'll get my coat.
Borrowing your way out of arrears is (a) hard and (b) dumb.
If you can get it done, you will end up with more debt than you have now at a higher rate.
If you can't carry the debt, reduce it.
Blame refugees?
The best way to start learning from your mistakes is to accept, in the first instance, that they were *your* mistakes.
Hope it works out.
