Hi everyone,
To all you finance experts,
I am in the process of looking our for my first Prop. I am self employed and I need a Low/No doc loan. I have understood from reading this forum that an interest only loan with a 100% offset facility is the best loan to go for especially if you plan to convert the prop into an IP at a later stage. A broker has offered me a 90% and a 95% low doc loan which is at a higher rate than a standard loan. The trouble is that this type of a loan does not have an offset facility. While I do have a 20% deposit, I would prefer to only pay 5 or 10% as deposit and keep the remaining cash in the offset account due to my variable cash flow.
The broker suggested that I take the 95% low doc loan and then put the additional cash as an extra repayment which I can redraw whenever I want. Is this the best way to go? Will it effect my deductibility if I redraw the money every now and then for use in my business.
John
John
Firstly the problem is that with a lodoc loan > than 80% there is a limited market place of lenders.
85% is available at standard housing rates but when you get to 90 / 95% the choice is limited and the interest rate and charges start to climb.
Are you sure that you are unable to show sufficient serviceability to qualify for a full documentated loan?
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
Yes Richard,
A lo/no doc loan is most suited to me. I do not mind paying a slightly higher rate as it is just the cost of doing business. But having access to cash is very important to me.
Any suggestions if there is a better option than a redraw in this case.
John
Hi John
Lodoc / Nodoc loans come in all different guises.
You can always have a lodoc / nodoc line of credit which gives you flexibility to come and go when you want to. Ideal for accessing equity and then paying it back redrawing on it etc. As long as the amounts drawn out are always for Investment purposes then the interest is deductible.
If not you would be better off to split the accounts and have one for private use and one for investment / business use.
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
Thanks Richard for that.
Unfortunately I am unable to get a Line of credit with the 95% low doc. Looks like I might have to go for the interest only loan.
John
John
Above 85% you will be unable to get a Lodoc / nodoc with an offset account or LOC.
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
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