I’m about to purchase my first investment property. I require help on the correct questions to ask the banks so you don’t get charged extra fees etc and also the correct structure to have in place so I can draw down the existing equity to reinvest in more property.(I was thinking along the lines if setting up a 5 year fixed interest only loan with a draw down facility availible). I would really apprecate your feedback on this matter or if there are links you can direct me to which can give me this infomation. I will be investing in New Zealand if this helps at all. I look forward to your feed back. John[cap]
Hey John,
It would help to know if you have an owner occ property – is that the equity you will be tapping into? If so, simplest would be to get a line of credit on that up to 80% of valuation, and use the excess over any existing debt for a deposit (20% if possible to avoid Mort Insurance costs) and get a cheap as chips I.O. loan for the balance. Might I suggest you talk to a Mortgage Broker – that’s what we do! I’m in Sydney, but there are plenty of Brokers in these forums – probably a good idea to use one close to you, but not strictly necessary.
If you haven’t got an existing property with existing equity then just put down the smallest deposit the sums justify, perhaps using a loan that has a 100% offset attached, as somewhere to park your excess funds until you go again.
As I mentioned, think about using a Broker – the service is free, and most should be able to tailor a loan structure to suit your circumstances. Happy hunting.
theloanarranger
Originally posted by theloanarranger:Hey John,
It would help to know if you have an owner occ property – is that the equity you will be tapping into? If so, simplest would be to get a line of credit on that up to 80% of valuation, and use the excess over any existing debt for a deposit (20% if possible to avoid Mort Insurance costs) and get a cheap as chips I.O. loan for the balance. Might I suggest you talk to a Mortgage Broker – that’s what we do! I’m in Sydney, but there are plenty of Brokers in these forums – probably a good idea to use one close to you, but not strictly necessary.
If you haven’t got an existing property with existing equity then just put down the smallest deposit the sums justify, perhaps using a loan that has a 100% offset attached, as somewhere to park your excess funds until you go again.
As I mentioned, think about using a Broker – the service is free, and most should be able to tailor a loan structure to suit your circumstances. Happy hunting.
theloanarranger
Thanks for the feed back,
I will be putting down a 20% deposit on my first property. The property will be positivly geared with tennants in the property. I will be buying in New Zealand but I want to be able to access the equity in the property ASAP to draw down to use as another deposit.
theloanarranger
[/quote]
[/quote]Ok, if you put down 20% (+ costs)and it’s +CF would suggest 3 or 5 years I.O. no frills or honeymoon loan. Your choice of lenders will be limited to those happy to lend to you here on a property in NZ.
To redraw equity I assume you believe the value of the property will increase fairly quickly..?
Should you want to draw money out you would have to have the prop revalued and the loan drawn back up to 80% of the new valuation figure. If you go over 80% of whatever val figure the lender is using then you’ll be up for mortgage insurance premium. If you don’t believe prop will increase in val shortly might I suggest paying 10% deposit (and the associated M.I. premium) which leaves the other 10% to use on another property.‘xcuse if this sounds pretty basic but I don’t know what you know and have made assumptions on situation based on your last post. Happy to help with suggestions – can email me direct on [email protected] with specific info, call me on 0412061218 or else check out these forum pages by doing a search – there’s a heck of a lot of info here, just for the reading..
Cheers
theloanarranger
Hi John,
I think the max LVR is 80% for a non NZ resident on NZ property investments,
Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:1800 820 500
VictoriaPLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
Thankyou for everybodies help. Just to let you know I’m a new zealand citizen but I reside in sydney. Thanks again. If you have anymore advise it will be much appreciated.
Thanks John
You must be logged in to reply to this topic. If you don't have an account, you can register here.
