I’m really interested as to what people think the effect of Principle Only (Interest free) home loans will be?
What will it do to the banking industry? If Derivex takes off, surely others will follow in their foot steps, and the banks with current rates would simply not be in the competition.
Would it cause a further boom in the property market? People would be able to borrow a lot more on PO loans, which means they will be able to spend more. More people would be able to afford to enter the market, so demand for property would rise.
Would the bottom drop out of the rental market with so many more being able to purchase their own homes?
Would the building industry have a boom?
What would the people who negatively gear do? Would people still take out IO loans to be able to get the tax benefits?
Would the government withdraw things like the FHOG and Stamp Duty Exemptions because of it being cheaper to borrow?
Would wrapping and lease options still be viable?
I’m sure implications of something like this would be far reaching. What do you all think?
Kez
I think it’s too early to tell.
I haven’t heard of anyone receiving finance for these loans yet. Best give it some time in the marketplace to see how viable they really are.
They gave out their first loans in December. Simon is the first broker accredited in the country. Another group is going through next Friday. Hopefully, I will be in that group. They will be everywhere by February / March.
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty LtdHow do they earn money?
Byronent
Adelaide SAFantastic !!! – Whats the catch ?? As steve would say…
If it sound to good to be true …..
[nowords]
Challange the Norm
Hi all
Derivex is very new and i think people are still cautious of this.
If one goes with derivex what does the fine print say.What if you wnat to refinance
What if you want to increase borrowingsThese are thing people are now comfortable with, dealing with banks etc.
People putting the PPOR and major IPs with an unknown seems risky to most.
I guess it comes down to what is the worst thing that can happen to the person taking the loan from derivex if things go wrong.
cheers
alfWho cares how they make money? They cannot take back your funds (or property) unless you default like any lender would.
Why would you want to refinance? There is a fee in the first few years but no-one else offers interest free loans.
There is no poblem getting more money if you have some equity. It is far more flexible than any lender I have seen.
The contracts require solicitor sign-off. If the contract does not make you feel comfortable, don’t sign it. You will not risk anything at all if you just have a look at the offering for yourself.
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty LtdSimon if you are the first broker accreditted in the country with this Finance group then have you written out any loans thus far? What is their criteria, restrictions and flexibility like on loans comparable with current conforming bank lenders, etc.
Many thanks in advance.
Kind regards,
Gatsby.Gatsby,
Gimme a week or two to make that assessment!
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Fully Accredited With Derivex PTY LTD and IFHL PTY LTD
***Ask about our Interest Free Home Loan***
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
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