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You mention that you have a house on the back of the place you subdivided but don't mention any debt against that do you have finance against that property? How much? When do you expect that to be complete?
Dustin McMahon
dustin@yourbroker
0430 110 304
Hi Ozman, as it seems that you would understand a bit about finance and purchasing property. My best case scenario for my client would be they get, a loan from one of the many lenders out there, that suits their financial needs now and into the future, I'm sure all other brokers on hear would agree. For example if you looking for the absolute sharpest rate your not going to get advised things like if you purchase a PPOR that is going to become an investment property in the future you shouldn't pay the loan off, the cost of this will far out weight the rebate of trail that is getting discussed on here . The most important things about getting a mortgage is structuring it right and there is much more to consider than the rate. On a side note what is a best case scenario????
With your $52k it sounds like it was borrowed against the investment so the bank would want it paid back if the investment was sold. Depending on if the new property has increased in value at the time you are selling the investment you may be able to keep access to the funds. Depend on the lender you are with, but also what you are looking to do?Biggest thing to remember is the loan will have to be secured against something, so if you sell the property and haven't got equity in another property to replace it then it will have to be paid back.
Hi Adam,
With the refinance unfortunately it is not determined by when you redraw the money.
The simplest way to look at it is what the money is used for not what the money is secured against.
eg. it appears from the information you have given you are borrowing an additional $50k against your current property to use on your future PPOR. As the $50k is used for the PPOR it is not tax deductible despite being secured against the IP.
I hope that makes it a bit clearer. Make sure when you do the refinance you are talking to someone who know what they are talking about otherwise if you combine these two loans it can become quite difficult for you accountant to claim tax wise.
Regards
Dustin McMahon
Your Broker
[email protected] 0430 110 304
Hi Adam
how much is the current loan on your property? It will only be that amount that you can claim on the IP.
Generally you are better off putting spare cash in an offset against PPOR. If you pay down the loan and down the track decide to make that property an investment property you will lose the tax deduction on the repaid portion.
Dustin McMahon
Your Broker [email protected]
0430110304
Terryw wrote:Must be a non bank lender – these are often best avoided.I don't think that this is a case of the lender charging for the vals i think it's the broker charging a service fees. Why do you say non bank lenders are best avoided? I think they definitely have their place in the market and there are some great products they offer.
Dustin McMahon
0430 110 304
Hi Conolly,
As Jamie said it depend is the broker charging you for his service or is it a case of he is charging as the lender charges for the valuations. If he is charging to order the vals I think you could find a broker on here who would do just as good a job without looking for a quick cash grab charging for vals.
Being an ongoing client of theirs they would have been receiving ongoing payments for your loans and they will also be getting paid for the loan on your next purchase. How many bites of the pie do they want?
regards Dustin McMahon, Your Broker 0430 110 304 [email protected]
BUYER BEWARE!!
Basically it is the buyers responsibility to do their own due diligence and make a decision based on that.
I probably wouldn't even go to the extent of getting a lawyer to do a letter. Contact your conveyancor who attended settlement and discuss it with them. They will be in the best position to go through your concerns and check everything is in place with your contract. out of interest who was your conveyancor?
regards
Dustin McMahon
Your Broker
0430 110 304
Generally you will want to have your investment property interest only and work on paying off the debt against your PPOR. I think you may be getting a bit confused about negative gearing.
Regardless of whether the investment property is negatively or positively geared you want to pay off your PPOR first. Your PPOR debt can't be claimed on tax where as your investment property interest can This is why you want to pay off your property first. If your mortgage broker cant give you that basic bit of information i would be a little concerned.
To try and give a very basic idea of negative gearing, If you receive $10,000 in rent per year and pay $12,000 in interest you would loose $2,000 = negative (not taking any property expenses etc into account) the loss equal negative. If you had a property that was rented for $12,000 and paid $10,000 $2,000 profit = positive (not taking any property expenses etc into account). Taking this into account if you pay your investment loan off before your PPOR loan you now receive $12,000 rent but have no deduct able interest now you make $12,000. You are eiher taxed or can claim a deduction against your income for the amount of profit/loss.
I hope this gives a bit of an idea of why you should be paying off you PPOR debt.
Dustin McMahon
0430 110 304
I use Doug Napier his company is Doug Napier Insurance 0407 772 174, he does an great job. He's got a couple of tough ones over the line for me.
Dustin McMahon
Your Broker
[email protected] | 0430 110 304
With the mortgage for Off the plan it can be near impossible to get through SMSF. It's my understanding that this is not just because of the lenders but also because of SMSF compliance. When purchasing a property in a SMSF you cannot not borrow to improve this property.
When you purchase of the plan you essentially purchase the land then later borrow to pay for the property placed on it (Improving the property) unfortunatly yes this seems rediculous. I know of someone who has bought land in the SMSF and are now unable to build on it as they don't have the funds to do it.
There are NRAS properties available that are already complete this can be done in SMSF as you are purchasing a completed product. Might be a much easier way to go.
regards
Dustin McMahon
Your Broker
[email protected]
0430 110 304
As Jamie said there are lenders who will take into account permanent employment if you've only been there for 1 day. So to say whether your better buying prior to moving it is very hard to answer without knowing. What employment you are moving to? eg.casual, permanent Is it same industry, large pay increase/ decrease. How much equity do you have available.
It is really something you would want to discuss with a broker to work out your specific scenario and the goals you want to achieve.
regards
Dustin McMahon
Your Broker.
0430 110 304 | [email protected]Ultimately whether you use an agent or not what you sell it for is a negotiation. I would let the tenants know that the listing price is $449K . Then leave it to them to make an offer.
If you get a valuation done yes you are going to get a more conservative value, but accurate that could be questionable the way valuations are coming back at the moment. I would question what you want a conservative valuation for when you are the vendor.
As a vendor you always want to get top dollar and that is your right. I would leave it in the tenants hands to make an offer. I would still go for top price and only take into account the money you save on commision when you are considering there top offer. eg. If there final offer came to be $425K do you want to risk going on the market to possibly get an offer of $430k only to have to pay agents fees and marketing fees? that is the only time i would take agents commission into account.
You also have to remember the tenant have to take into accoun they are buying a house that they already live in so they will be saving money on moving, not to mention stress of moving and hassle of you having the house on the market while there in there.
Go for top dollar but keep in mind what you may lose if you put the proeprty on the market.
As for doing private sale get in contact with your conveyancor and discuss it with them they will have all the documents for doing up private sale documents. quite an easy process.
regards
Dustin McMahon
Your Broker
[email protected] | 0430 110 304really personal loan to complete 95% purchase???
Dustin McMahon
0430 110 304
[email protected]Depending on how you plan on working deposit and other expenses it may be worth looking at getting a property share loan. These are two seperate loans set up individually. This way down the track you are only responsible for the loan you take out over the property, and your sister would be responsible for the loan she takes out over the property.
regards
Dustin McMahon
Your Broker
0430 110 304
[email protected]I am one for thinking outside the square when needed. But if you don't have to why would you. Ashley you have already said you have significant equity. DOn't over complicate the finance.
There are lenders that will do good lvr's to an owner builder with builders licence. I would go down this path. no need for fraudulant documents and it's straight forward.
Whether to sell own house now and move into a rental or access equity and stay there till build is complete would be the other question i would be asking. But don't over think the finance, let your broker work that out.
regards
Dustin McMahon
Your Broker
0430 110 304
[email protected]I would think in basic terms no you couldn’t do it. Generally to access the cash you would look at taking another mortgage to access the cash. As the client already has a $220k loan they could only access $20k at 80%. They may be able to go to 90% but then they would pay LMI.
Hope this clarifies. Without knowing the full situation and what they are doing it for it’s hard to know the best way to do it.
Regards
Dustin McMahon
Your Broker
0430 110 304It is a very open question. For what purpose are they looking to do it? Eg. Assert protection, for some one else to get finance? There are ways to do both but they are both totally different.
You might need to elaborate on the situation.
Dustin McMahon
Your Broker
0430 110 304
[email protected]it would be better to leave both loans seperate if you want to make ip2 loan i/o you can but keep it as it's own loan.
as ip1 is the one that you plan to live in this would definatly be the one you want paid off as you have done.
Dustin McMahon
0430110304
Your BrokerRachel
I would agree with Mattsta it is not always best to have these loans cross colaterised. It maybe best to speak to a broker as your bank is always going to tell you it's best to have all your egg in one basket (theirs!!) Talking to a broker about what you plan to do can save you time and money down the track.A common problem people are seeing with cross colaterised loans and the recent decline in property prices when they go to sell one property they do not get all the proceeds of the sale as the bank wants to revalue the remaining property and retain more of the funds due to it's decrease in value. You wont have your bank tell you that.
Dustin McMahon
Your Broker
0430 110 304
