Have any of you heard of the Cash Flow Mortgage?
http://www.cashflowmortgage.com.auI went to a seminar a few months ago and its creator was promoting it.
Just wondering if there was any positive or negative feedback about this product. It sounds ok in theory…..[evo]
I just checked out their website. I would be very careful.
The interest payments get added to the principal of the loan.
This means the property is not really cashflow positive. The hope is that the property value will rise quicker than your debt.
Would be interesting to find out if they foreclose if the LVR gets too high as the market does not go up as they predicted.
They work on a 10% growth (doubling every 10 years would be a 7.2% growth).
They also assume that the rents will grow just as fast.
Assuming that rents will only adjust according to the CPI of about 3%/annum you may be out of pocket quite a bit after the first couple of years.Their interest rates are slightly higher than standard products, but not outrages (about .5-1% higher).
In general I believe you would be better off trying to find/create cashflow positive properties.
I don’t want to damm the product totally, but I see a big danger of being based on best case scenarios. And we are currently in a flat market.
Maybe it could be good for somebody who wants short term loans, but I suspect that the DEF’s are quite high
Do a search on this forum and others like it and you will find that it has been discussed many many times before.
I personally know of around 10 mortgage managers promoting the product and agree that there is a time and a place for it and this market maybe not be the one.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
The topic has been discussed in numerous other threads in recent days, mostly containing warnings and the potential pitfalls of such a loan.
Wayne Skewes
Mortgage Broker
Email [email protected]
http://www.eaussie.com.au/Mortgages/Aussie_Mortgage_Adviser.asp?ContentID=852280
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