I'm Ready To Start!!!

[USANA]

Hello Everybody,
About Three Months Ago I Posted A Letter Stating That I Had Very Little In Savings But I Was Desperate To Get Into The Property Market And Was Considering A No Deposit Home Loan.
The Invaluable Advice Which I Received From Most Of You Was To Stay Away From These Loans, Bite The Bullet And Save For The Deposit Whilst At The Same Time Educating Myself On Everything To Do With Real Estate. You Told Me That At 26 Years Of Age I Have Time On My Side And You Know What It Turns Out That You Were All Correct. I Thank You Very Much For This!!
Anyway To Cut A Long Story Short I Have Worked Extremely Hard And Saved Up For A Deposit And With A Little Help From My Parents I Now Have $50,000 To Launch My Property Investment Career.
I Am Currently Using A Mortgage Broker To Obtain Finance And He Has Recommended A Variable Line Of Credit Loan Through St.george.
The Loan Would Be For My Ppor And From There I Will Use The Equity In The Future To Buy Further Property.

is The Loc Loan A Good Idea To Use For My Ppor?
does Anybody Here Deal With St.george? What Are Positives/negatives?
are There Any Traps Or Hidden Fees With This Type Of Lender/loan?
i Am Currently With Comm. Bank, Should I Stay There?
can I Still Keep My Savings Account Open With Comm.bank If I Decide To Get The Loan Through St.george. Is There Any Point In Doing So?
is There A Better Way To Structure My Purchase. Ie. With A Better Loan Or Lender Etc.....???

The Purchase Price Of The House I Want To Buy Is $260,000 And I Want To Use My $50,000 Plus The $12,000 First Home Owners Grant In Victoria To Fund The Purchase.

If Anybody Has Any Advice To Pass On Any Of The Issues Above Or Anything Else Regarding My First Purchase, Please Allow Me To Tap Into Your Brains As I Am A Little Overwhelmed With All The Information At The Moment. I Don't Want To Rush Into Things And Then Realise I Have Made A Huge Mistake By Choosing The Wrong Lender Or The Wrong Loan Or Have To Pay Fees And Costs Which I Was Unaware Of.

I Look Forward To Your Input And Thank You All So Much

[Aceyducey]

Go Usana!

(you don't need to capitalise every word though) :)

Are you using one of the brokers who frequents this forum? if not - is the broker you are using experienced in loans for investment purposes, or is he simply directing you to the lender paying him the best commission?

You should consider the relationship with the mortgage broker a long-term one & ensure that the broker is thinking the same way.

Lending with St George shouldn't affect your banking with other providers - this isn't the seventies any more! :)

House - I assume you've done your research & ensured that the price is fair, the capital growth prospects are decent & should you in future wish to change it into an IP that you will get a good rent for it.....if you haven't done this research - you should!

For how you should structure - this is your first...just get it bought....then as you move forward & learn more worry about structuring & best loans. Better to act and get your decision (finance, structure, negotiations, etc) 80% right then to not act until you have ensured you'll get it all 100% right - you'll never buy!

Cheers,

Aceyducey

[geoffw]

Well done on your hard work and saving. Congratulations!

I endorse what Acey has said.

I don't know why the MB would recommend a Line of Credit loan for buying a PPOR. It sounds a bit odd- but maybe one of the Mortgage Brokers on the forum could clarify? (It does sound to me like a commission boost thing)

[XBenX]

Its definately NOT to preserve possible tax dedn's if you wish to make the PPOR an IP in the future.

Id suggest a few other reasons...

[Rolf Latham]

Hiya

Nothing suss here, sme comm paid on LOC vs most other loans with same lender, some evem pay less for LOC ike NAB and Suncorp.

The people are right in my view, in general there is a benefit of an offset structure over a LOC structure in most PPOR cases, id seek some additional advice pertinent to your scenario.

ta

rolf

[willair]

Usana,
It always makes my day when i see people like you,but how will you deal with
Real Estate sales people,imho,the first step is to select several reputable agencies
and find an area that has appeal and resale to your investment plan, you already have your plan,most go in blind and fail then look for somone to blame dont fall into that lineup they are always out there. the property you invest in must be in good condition
and adequately painted and presented,do not allow the real estate sales person to make you make a rushed decisions,ask sensible questions,Learn how to say NO,Sales people are taught to create a false sence of urgency,maybe 6 months ago this was the case , this is a different marketplace in todays real estate,imho its a buyers market.
and the last one, learn how to walk away from a deal the next one is just around the corner..in ten years time you will sit back and say if only i had bought more property back then.....
Good luck..
willair..

[XBenX]

Hiya

Nothing suss here, sme comm paid on LOC vs most other loans with same lender, some evem pay less for LOC ike NAB and Suncorp.

The people are right in my view, in general there is a benefit of an offset structure over a LOC structure in most PPOR cases, id seek some additional advice pertinent to your scenario.

ta

rolf

There we go... answer from the industry =)

Which is why somersoft is so good!

I was thinking a the trail could be larger on the LOC due to larger loan balances if they get out of control and dont end up reducing the debt.

[Simon]

I don't know your situation but from what you have just advised I am not sure I would recommend a LOC for you at this stage.

Why don'tyou consider a variable loan, perhaps IO, with 100% offset.

Hope everything turns out terrific.

[WillG]

Hi USANA,

Well done on saving the 50k. Great advice from the folk on the forum as usual. I suggest the same as Simon (Why don'tyou consider a variable loan, perhaps IO, with 100% offset). It will give you more flexibility and could be cheaper than a LOC

Good luck

[Corsa]

Hi Usana

Well done on getting closer to taking action and taking a step closer to acheiving your goals.

With $50k to start, and the mental preparation you have undertaken, you are well placed to launch your Property Investing Career. This purchase is taking into account and you also seem to be thinking about how to fund the 2nd purchase with equity and so on so you have a plan to get from Property 1 to Propery 2 so that sounds great!

I know it can be overwhelming with the information that you are being confronted with at the moment but just process it all step by step to work through what it is that you need in order to acheive your goals.

Good luck with the new purchase, not far to go now.

Kind regards

Corsa

[USANA]

:d
Wow! I Can't Believe My Luck So Far......
I Have Just Returned From An Inspection Of The House And It Does Have A Bit Of Potential. The $260,000 Asking Price Is Approx. $10,000 Below Market Value So It's A Great Start There.
However It Gets Even Better, The Agent For The House Used To Be My Best Friend In High School And I Haven't Seen Him For 5 Years. He Has Been A Real Estate Agent For Four Months And Is Currently On Trial By His Employer So He Is Very Keen To Get Some Sales On The Board To Show His Worth.
I Asked Him Afterwards Why The Lady In The House Moaned When I Asked Her Where Her Husband Was. He Told Me That They Have Three Young Children And He Has Taken Off With Another Woman So She Just Wants To Sell The House And Get Out Of There. However The Husband Will Not Sell So Easy But If I Offered Approx. $250,000 They Would Be Very Tempted (that's $20,000 Below Value)
I Know Some Of You May Be Thinking That My Mate Is Trying To Pull One Over Me But Believe Me, I Have Done My Homework Here And The House Is Definitely Worth $270,000. He Is Telling The Truth And I Am The Only One That Knows Ths So Far.
So Tomorrow I Will Put In An Offer For $245,000 And We'll Take It From There.


Wish Me Luck Guys!!

Thanks Heaps
Usana :) :) :) :)

[duncan_m]

:d
(that's $20,000 Below Value)


You Missed A Capital Letter At The Start Of "That's" But It Was The Only Word You Missed, Good Effort :)

[Ecogirl]

Usana
I have to say that it does make your threads difficult to read When You Write Like This....maybe i need to wear my glasses more :)

Good news with the house - great to see you moving forward. It's easy to suffer from paralysis analysis....

Ecogirl

[geoffw]

You Missed A Capital Letter At The Start Of "That's" But It Was The Only Word You Missed, Good Effort :)Hehe, the smilie at the start didn't become a smilie, because it wasn't a capital D :D

(Don't mind us Usana, we'll pick on anybody).

Well done- it looks good.

What sort of rent are you expecting?

[XBenX]

Got to love the D's =)

[USANA]

Hi guys,
Sorry about the capital letters. I log in to my lap top with capital letters and sometimes forget I have Caps lock still activated.
Hope I haven't caused you any blurry vision, if I have I can recommend a good optometrist!!

geoffw,
This will be my PPOR for now so I will not be receiving any rent however the rental rate in the area for such a property would be approx. $240/week.

:) :) :) :) :) :) :) :) :) :) :) :) :) :) :)
good to see the smilies worked this time (lol)

[geoffw]

Hi guys,
Sorry about the capital letters. Hehe, well done Usana.

That must be what they call capital improvement.

It sounds like you may have a motivated lender. Might it be worth while trying a little lower than $245K?

(When this is all over, it might be worth while to tell your mate not to let out such things- he's not helping his vendor :D . Don't tell him now though! )