All Topics / The Treasure Chest / Questions about Finance

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  • Profile photo of GracieGracie
    Member
    @gracie
    Join Date: 2002
    Post Count: 3
    January 24, 2003 - 3:43 am

    Hi there,

    Just making my first post is a bit scary! But I need to get out my comfort zone, so probably not a bad place to start.

    All I can say is what a wealth of knowledge the members of this forum have and thanks to Steve and his team for making this available to us.

    I have some questions about financing:

    We have about 500K equity in our own home, is it best to stick with our current lender to get finance for an investment property or can we shop around for the best deal?

    What is so good about having this equity? I assume the lender is more likely to give you more finance if they think you can sell your property to pay off your bad debts?

    I suppose I want to secure the right finance strategy from the start so that down the track we can continue to obtain finance and achieve our goals?

    Thanks, hope my questions make sense!!

    Profile photo of Steve McKnightSteve McKnight
    Keymaster
    @stevemcknight
    Join Date: 2001
    Post Count: 1,763
    January 24, 2003 - 4:23 am

    Hi,

    Welcome to the community and good on your for having the courage to make a post. Thanks also for your kind words.

    I have the time for one quick post…

    Re: loan provider…

    You may find that your existing lender will be happy to help you out, but I would certanily shop around.

    The equity that you have allows you to redraw against it to fund the deposits on other investment property, rather than needing cash.

    What I am trying to say is…

    The question of raising money for a deposit is separate from the question about who to use to finance the property.

    You have the deposit issue licked via redrawing (or refinancing) the equity in your property.

    The issue of financing… start with your current lender, but it would be wise to shop around as your current lender will probably just process your application for finance like any other.

    No harm in trying though.

    Cheers,

    Steve McKnight

    **********
    Remember that success comes from doing things differently.
    **********

    Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
    https://www.propertyinvesting.com

    Success comes from doing things differently

    Profile photo of richfinancemanrichfinanceman
    Member
    @richfinanceman
    Join Date: 2003
    Post Count: 2
    January 29, 2003 - 1:23 am

    Hi there,

    I work in finance and I would highly recommend that you shop around.

    I would make enquires with the major banks about their professional packages. The bank’s all want your business.

    Dont forget it is not always just the interest rate that is important, it is also the structure of the loan, does it allow for lump sums, can you pay your salary directly into the loan account?

    The problem with staying with your current lender is that they will not offer you a honeymoon rate or any other specials they have at the time as you are an existing customer.

    Thanks

    Profile photo of MargybMargyb
    Member
    @margyb
    Join Date: 2003
    Post Count: 2
    January 29, 2003 - 12:46 pm

    This is the first time that I have EVER used a forum so please forgive me if I do something wrong.

    My comment on this subject is that today, I was given advice from the owner of a large Real Estate company that as we already have several properties with the one instution, that we should be presenting a strong case to them for extra funds for new properties as they already know our history and ability to pay. We did receive honeymoon rates and discounts on our last purchase due to having multiple properties with one lender. So yes look around initially, but once you have found a good lender, I feel you should stick with them, and form a good relationship for future investing.

    BTW, totally unrelated, but I would like to add that I found this site purely by accident, and didn’t know it existed, but have spent the last hour looking through the contents and am sure that this will definitely be a site to visit regularly and where I will learn heaps that will help me in my investment goals.

    Profile photo of GracieGracie
    Member
    @gracie
    Join Date: 2002
    Post Count: 3
    January 30, 2003 - 1:00 am

    Thanks for your advice everyone, at least I know I can got to any lender to get finance. I was told that I might have to use my current lender and felt that was a bit limiting,

    I’ve got a question about Land tax but I’ll make a new post,
    Thanks
    Gracie

    Profile photo of RobJaniceRobJanice
    Member
    @robjanice
    Join Date: 2002
    Post Count: 27
    January 30, 2003 - 3:03 pm

    quote:

    What is so good about having this equity? I assume the lender is more likely to give you more finance if they think you can sell your property to pay off your bad debts?

    Very true Gracie.

    Personally we have never yet cross collateralised

    Enjoy the move out of your comfort zone

    Regards

    Rob

    “A bank is a place where where they lend you an umbrella in fair weather and ask for it back when it begins to rain

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