A question for all,
I am interested to know what most people purchase wraps on in terms of LVR. I have heard of 80% and 90% being common, has anyone used 95%? If 95% is used, does this mean that the new buyer could have more equity than the wrapper if a large deposit is taken?
I know that the cash on cash return would be much better on 95% but just want to be wary of the pitfalls on this.
Any help will be appreciated. [
]Cheers,
Matt.
Hi Matt
I have used 95% for all my wraps. The cash on cash return is great, with some having a return of infinity. This has occurred, as the deposit I have received has been greater than my costs.
If 95% is used, your loan amount may be greater than the purchaser if they provide a large deposit. I guess the way you get around this is to put more down as a deposit i.e. a 90% lend, with your banking institution.
Hope this helps
Oscar
Hi Oscar,
Any chance you might be able to share how you get 95% LVR for your wraps on a consistent basis – don’t the Mortgage Insurers get ‘antsy’ about it?
If you don’t mind, I’d love to know…
Kindest Regards
Jason S
++++++++++++++++
Check out my E-Bay Auctions:
http://cgi6.ebay.com/ws/eBayISAPI.dll?ViewSellersOtherItems&userid=jayess70&include=0&since=-1&sort=3&rows=25Hi Oscar,
Thanks for the reply. I was hoping that 95% LVR was a possibility and others were doing it. In almost all the scenarios I run on properties with my excel spreadsheet, 95% LVR gets a return of 80% or higher.
Now all I need is a lender who will let me do lots of these deals. Do you mind if I ask who you use?
Cheers,
Matt.
Matt
See my previous post dated 11/02/2003. The topic was called 95% LVR.
Cheers
Oscar
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