Hi, Hope experts here can help me. We’re looking at buying our 1st investment property. Here’s our situation. Our Home Loan is with CBA. Total owing is 368K (Fixed is 283K, Variable 85K). Estimated value of our home is 440K-460K. We have an offset account of 10K and a redraw amount of 10K. I have a separate personal savings of 6K in another bank. So, in total we have 26K available as deposit. We’re looking at buying within range of 200-250K. We met with CBA and guy suggested to use our funds for deposit and they are willing to lend us the balance 95% plus the 2.5% LMI. Is this the best way to do it? I read in some comments about putting all funds in the loan account and reborrowing against it for the deposit costs (meaning depositing the amts in offset account and personal acct directly to the variable loan acct and applying for LOC for deposit and initial costs). Just not quite sure if I would have enough equity to do this???? Is it OK if I get the investment loan from CBA as well or should it be from another bank? Guy insists this is a separate loan so no cross securitisation. Also, as I am in their Wealth package, I can have discounted rate. Is there any disadvantage of putting the home and investment in one bank (note that there are in separate accounts). Appreciate your valuable advise/inputs.
Hi batgirl
You could top-up your current loan to 90% and access about $28k to put towards your next purchase. Some LMI will be payable but at least you avoid using your own cash and the total borrowings would be deductible.
Hope that helps
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Thanks JamieM for your comments.
I do have some questions:
1. We have previously paid LMI in our home loan. How much more LMI do we have to pay?
2. Can this LMI be capitalised on the top up loan?
3. Is the the top up loan a separate loan account?Thanks again for your help.
batgirl in answer:
1) This will depend on a couple of factors but would normally be paid on the top up amount or the new LMI less that already charged and paid..
2) Yes and No depending on the lender and their current policy.
3) Yes and No but would suggest it would be so it can clearly be identified.Personally I wouldnt use CBA for an investment loan if you have your PPOR with them.
Why not drop Jamie an email and get him to write the new business for you.
Cost you nothing and you get free Professional advice. Not sure where else you can get such a service.
in fact reading your comment on how the CBA told you to structure the new loan i think i would be ringing Jamie quicker rather than later.Another piece of inaccurate structuring advice from a financier.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Sounds like CBA is the option, they have good rates at the moment. 6.96% or 7.27 comparison on a 95% LVR
Unfortunately the lowest rate (and you can do better than 6.96% on a 95% lvr anyway) is not what most investors home in on.
There are 101 other considerations.
As i mentioned earlier the way your CBA manager has suggested you structure the loan is totally inappropriate for an investor.
Just shoot Jamie a line and get him to sort it out for you.
Professional advice can make a big difference over some unqualified Bank johnny.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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