NEW INVESTMENT LOAN – 100% No Deposit + Lends Stamp Duty without any additional supporting security. Any Comments or Feedback on this (details below)?
First Permanent (a lender owned by Merrill Lynch) has just brought out an investment loans that is 100% No Deposit PLUS lends you all the Stamp Duty – Best bit is they DON'T REQUIRE ADDITIONAL SUPPORTING SECUIRTY of any kind (such as your family home or other IP). They also offer 3 years interest only and variable or fixed for 3 years (plus will lend on a 50 years term)No other lender in Australia has a loan like it. Given the benefits it delivers, its 8.8% p.a.interest rate is good too (tax deductable anyway). No Cross Collateralising of Properties on No Deposit + Stamp Duty Lent. Fantastic – Lender Details @ http://www.firstpermanent.com.au
From an investor's viewpoint, it is the perfect product because:
-> the investor is putting in vertually no equity – Thus – his return on equity is maximised;
-> no need to muck around cross collateralising 2 or more properties OR putting the Family Home up as security; and
->No need to find thousands of dollars to pay for stamp duty – they lend that to youCAN ANYONE TELL ME IF THEY KNOW OF A BETTER INVESTMENT LOAN PRODUCT?
Not bad 3 posts 3 mentions of First Permanent even if you do work for them.
Nothing new several similar products have been around for a while with a cheaper interest rate and DEF.
Richard Taylor | Australia's leading private lender
Cool Mr. Deposit King. Can you tell me if there is an LMI and if so the % and LMI provider, and also the actual interest assessment rate for any applications. A better product? Make it a Lodoc 100% and I'll sign up this arvo!
TO Richard Taylor,
This IS NEW – There is no other lender in Australia that will advance 100% of the valuation PLUS all the stamp duty costs on a 'stand alone' security basis. First Permanent will capitalise costs up to 106% of property valuation. Other lender WILL require additional supporting security. It is also Australia's first ever 50 year loan.
Please provide a concrete example of a similar investment loan product that lends in excess of the value of the investment property on a 'stand alone' basis (i.e. not supported by additional security).
Regards,
N. D. King
What's the catch??
There has to be one.TO: v8ghia]
RE: Fees on First Permanent's stand alone No Deposit Investment Loan
OK – First Permanent does not rely on LMI at all. Rather, it requires payment of a Mortgage Risk Fee (MRF) to an unrelated 3rd party. The MDF (which is not insurance as such – but a loss sinking fund) is 2.57% of the loan amount (incl.GST). That MDF fee can also be capitalised / added to the loan to a maximum LVR of 106%. The exit fee (called a Deferred Margin Fee) is 2% of the initial loan value if discharged in the 1st 5 years plus a small Deferred MDF fee of 0.77% if the loan is discharged in the 1st 5 years. At the end of the day – it is a small proce to pay for hot having to put the family home (or other IP) on the line and put in little or no cash of your own. For all this – the rate of 8.8% p.a. is cheap when the major banks are charging 8.32% for an owner occupied standard variable rate product with an LVR below 100%.The product is Full Doc.
Regardsm
N.D.King
Hi,
I second v8ghia.
Make it Lo Doc and not only will I sign up but I am positive so will a number of my clients.
Sharlene
[email protected]No Deposit King wrote:This IS NEW – There is no other lender in Australia that will advance 100% of the valuation PLUS all the stamp duty costs on a 'stand alone' security basis. ).Regards,
N. D. King
Had a look at the website – it does sound like a great idea, and the rate is good for the loan. However, there are a couple of others similar. Wizard Homeloans do one (Ratebuster Plus) which is a Mobius product, who also flog their stuff through the broker channel. It is a 105% loan, but not as competitive interest wise that's for sure, and very postcode sensitive. Also only for owner occupied, not investment. Does require a lot of documentation and squeeky clean credit, as per this one you have mentioned. THanks for the heads up though – I;m sure many are not aware of this product. I would usually suggest a 'deposit gap' style personal loan if it can be serviced, at say an 80 or 90 % lend, to allow for LMI/Risk Fee reduction or elimination, and having a cheaper interest rate on the house loan componant. Scary amount to be geared….
All the best.This product isn't new, First Permanent have been doing 106% loans for quite a while. It's quite a good product, but in most cases you can get the same amount of money other ways and cheaper.
I am with Alistair not much is new and there are cheaper ways around it.
By the way the Shift key is on the left hand side of your keyboard and takes the capital letters off.
If you want to advertise ND King i am sure Steve will be happy for you pay for a banner site advert or similar.Richard Taylor | Australia's leading private lender
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