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You gotta love that.....I did the same. Gives one a warm fuzzy feeling for a little while, however I got sick of holding the title deed as it was dead equity so took it to another lender to get it leveraged and working for us once more.

Whats wrong them using an annuity? Mels parents are getting paid interest from the annuity provider without any costs incurred. They are not setting up a cash bond structure, only the annuity.

Yes providing you meet their DSR and you havent hit the wall. You appear to be fixated on fees. What are these '6 times' on the same money fees you are talking about? As mentioned early I'm charged no fees, so I'm at a loss to understand your point of view. Can you elaborate?

Because your LOC/s are already accounted for as being fully drawn by your bank/lender irrespective of whether you still have $100k still available in it or not. You drawing funds from your LOC does not increase your LVR any further. For loan eligibility, in the banks eyes its already fully drawn...

Yes of course you could use the $600k as further IP deposits but where are you going to obtain the balance of funds needed to complete settlement if you have hit the DSR wall with your bank/lenders? That's your paradigm..What is 'real' cash flow? Isnt cash flow derived from income? If you sell...

The cashbond structure is a last resort option tool at your disposal when you have exhausted other lower cost options to obtaining further loan funds. You have to have the foresight to keep sufficient funds available in your LOC/s to purchase a CB if thats the route you choose to pursue for...

Yes you could use this already approved LOC to purchase the IP outright. It all comes down to your personal risk profile as to how aggressive you want to build your portfolio asset base. No prob....feel free to post further queries that pop up. Dont get me wrong Im not telling you this is the...

Yes still being done today...I strongly suggest you contact Steve Navra (who taught me about this strategy) to run your situation past him to get a clearer perspective on options available.

You are effectively purchasing an income so therefore it comes at a price. You should examine your own personal sitution and decide whether its for you only after you have explored and/or exausted all other less inpacting options available. The extra CG achieved by increasing your portfolio...

A CB will allow you to increase your asset holdings to approx 4 times the CB purchase price over and above your current capacity. ie so if you used your LOC to purchase a $150k annuity it would allow you to increase your asset base another $600k approximately. So instead of using your $600k...

Using your figures...The bank now see's $25k income.... the actual cost to you per annum is the interest rate difference between your borrowing cost from LOC and the Interest being paid you from your annuity provider. Yes correct. Its for asset rich cash flow poor investors with substantial...

Ian, Thank you for the Kudos. IM glad the post has been of some help to you. Maybe you can buy me that beer one day ...well heck, Ill even accept houses and/or a hotel from you too if you insist. ;)

As Rolf points out an Annuity is low return, however its not the low return as to the reason why we are utilising it. For us as investors when used in a cash bond structure it can be very beneficial to getting around lenders serviceability models. One must not forget tho that by structuring a...

Yes, as mentioned prior, utilising a CB is a last resort option to employ because using it does burn a very small portion of equity as Rolf also states here. You are effectively purchasing an income by converting equity into cash flow via the annuity IMHO its ideally suited to investors who...

Some do some dont. Its up to your MB to determine. You tell the bank how much you get per year. Provide proof of it going into you bank account. Show annuity statements if required. No they didnt hold it as security. I received one monthly annuity payment then MB submitted paperwork.

Annuity is all they need to know. The term CB refers to the financial structure of how 'you' are using the annuity to increase dsr in the banks eyes.

LOL.......well, it worked for me - plus they've given me more than the advertised top tier pro package discount! :p

For give me if I've got the wrong end of your stick, but you dont tell your lenders you are structuring a CB - they most probably (along with most mortgage brokers) wouldnt have even heard of such a set up. All the bank/lender needs to know( and you provide proof of) is that you have a set...

Get your MB to run different CB size scenarios to determine different borrowing levels. Then choose which size fits your requirements. Hope this helps. I look forward to your updates.

Ben, as far as Im aware there is no Annuity comparison website, other than looking on each providers website then weighing up the pro's & con's of one over the others yourself. Do you have sufficient available funds in an LOC/s to purchase an annuity? If so, how much and what size annuity are...