All Topics / The Treasure Chest / Finance structures (again!)

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  • Profile photo of FWFW
    Member
    @fw
    Join Date: 2002
    Post Count: 478
    May 30, 2003 - 6:18 am

    Hi all
    I’ve read a few times here and elsewhere about how Steve goes about borrowing money using company and trust structures, then replicating the structure when each one has borrowed to its maximum capacity.
    I know he does this with 80% LVR loans (hence no MI) but I’m curious to know if anyone has followed this formula using 90%LVR loans. I’ve been told that because the MI scrutinises the loan very very closely, they insist that guarantors have their credit history marked etc etc.
    Anyone have any experience of this?

    Keep smiling
    Felicity 8-)

    Profile photo of oscaroscar
    Member
    @oscar
    Join Date: 2002
    Post Count: 41
    May 30, 2003 - 7:24 am

    Hi Felicity

    You can replicate the structure with 80% loans but not 90% loans. Once you have hit the maximum limit LMI companies won’t give you anymore. One thing you can do is ask your mortgage broker which LMI companies each banks use. So when you max out with one lender, use a different lender who uses a different LMI company.

    I hope that makes sence (It’s Friday arvo!!)[:D]

    Cheers

    Oscar

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    May 30, 2003 - 2:21 pm

    Felicity

    What do you mean by
    “I’ve been told that because the MI scrutinises the loan very very closely, they insist that guarantors have their credit history marked”

    For any loan you apply for, your credit record will be marked (exept some private lenders). Even loans in a company name where you act as guarantor.

    I know Steve’s technique, but can’t understand how setting up new structures can overcome this. I think that as you get more properties, normal rules don’t apply and banks will treat you as a business.

    Now there are only 2 mortgage insurers left which is making it even harder to get multiple loans. PMI and GE are the 2 and they have policies that limit loans to about $600,000 in total. So maybe $1.2 mil all up is possible if your loans or mortgage insured.

    BTW most of the low doc loans are mortgage insured no matter what the LVR. Some that aren’t include St George, ANZ, ING and Suncorp.

    Terryw
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of FWFW
    Member
    @fw
    Join Date: 2002
    Post Count: 478
    June 1, 2003 - 12:55 am

    Hi Terry
    I did basically mean what you want on to say, which is that my information is that when you’re a guarantor for a company loan, your credit history will be marked. My broker had added, too, that since the collapse of the MI market, the remaining two were being a lot more careful and pedantic about the scenario Steve has outlined.
    Perhaps some of the people doing Steve’s course this weekend will have some more to add!

    Keep smiling
    Felicity 8-)

    Profile photo of williwilli
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    @willi
    Join Date: 2002
    Post Count: 186
    June 1, 2003 - 12:52 pm

    Steve outlined this over the weekend –

    Basically what came out of the discussion was that going guarantor does not show up on your CRA…

    ..some peole may disagree with this but people can only ‘teach’ what has happened to them – and everyone I know who has this structure have no guarantor record on their credit history…

    Hope this sheds some light…
    Pete

    …Beware of the dreamtakers…

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    June 2, 2003 - 12:21 am

    Hi

    Can anyone that has actually guarranteed a loan for a company purchase please verify if it shows on your CRAA or not?

    I think it would as the lender does a check on the guarrantor just as like they were a borrower. I hope I am wrong tho!

    Terryw
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of FWFW
    Member
    @fw
    Join Date: 2002
    Post Count: 478
    June 2, 2003 - 12:46 am

    NAT AUST BANK VIC & TAS made an enquiry on 25/2/2003 in reference to an application for a Real Property Mortgage account where you applied as Guarantor for the amount of $xxx,xxx.

    This is a direct quote from my husband’s credit file, from when we applied for our first loan using the company/trust structure, with ourselves as guarantors.

    Keep smiling
    Felicity 8-)

    Profile photo of FWFW
    Member
    @fw
    Join Date: 2002
    Post Count: 478
    June 2, 2003 - 6:17 am

    It’s under Consumer Credit Information.

    Keep smiling
    Felicity 8-)

    Profile photo of williwilli
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    @willi
    Join Date: 2002
    Post Count: 186
    June 2, 2003 - 6:31 am

    Very interesting….

    Maybe Steve, could shed some light on his circumstances……[:D]

    …Beware of the dreamtakers…

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    June 3, 2003 - 3:01 am

    Thanks Felicity 8

    Can anyone else check this?

    Terryw
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

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