Interest rates in USA are around 3-4%.
You can lock them down for upto 30 Years.So for those with higher exposure to interest rate moves take advantage of the lower offshore rate and the extended fixed term.
The issue of fluctuating exchange rates can be taken care of by taking a short position in the A$ on the SFE and just rolling over the contract to the value of your exposure.
If thought necessary.(I doubt the USD will stregthen any way.)
Anyone know where I can investigate O/S finance?
In the normal course of business you won’t be able to get US real estate financing for an Australian property. I have property in both countries so I can take out mortgage on my US residence (which previously had no mortgage) and use funds for Aus investment property. My Aus accountant advised that interest on the US mortgage would be tax deductible on my Aus IP because the key issue is the use of the funds, not the source.
Also, note that although the US mortgage situation is verty nice with lower rates and 30 year fixed terms, there are some drawbacks. The main one is “points” charged – that is an up front fee added into the financed amount. That is especially a problem for a short term holder as the cost os spread over fewer year.Thus the lowest rates charge 4 – 5 points (a point is 1%) and even usual mortgages charge 2 -3 points. No points means a higher rate.
Also, those wonderful rates only apply to non-investment property and only in certain areas. My US home in Washington, DC would qualify now for a mortgage of 5 – 6% (no points). My son in Phoenix just refinanced at under 4%. Other mortgages are higher, but still nice by comparison. Variables or shorter term fixed are lower.
RTTS
You must be logged in to reply to this topic. If you don't have an account, you can register here.
