Advice on best structure to carry on

[magpie season]

Hi smart people, have to approach some lenders this week about following;

1.Recently approved top up loan against Macquarie Fields NSW ip worth 250k about 130k owing to St George.

St George will release about 40k at an 80 % lend to buy 2nd ip, also 30 k available in redraw .

2.Renting cheaply in cabramatta 2 bed $240 ,owner raised rent for first time (roof leaking now fixed) in 3 years to market value .

3.Want to stay in area so placed deposit on Carramar NSW 3 bedroom unit 245k . Should rent about $370 after some tidy up minor reno.

My questions are should/can i still grab 40 k against 1st ip , and borrow $196 k to make Carramar an 80% lend avoiding lmi?

Please consider i have to live in Carramar property for maybe 1 year to fix up.

Should i take out Carramar loan with second bank? StGeorge staff assured me loans not cross x.
Thanks for any advice

 

[Aaron_C]

Personally I wouldn't put a deal to St George unless there was a very good reason to do so.

 

[Rolf Latham]

Firstly, im a fan of lmi in MOST circumstances.

But we dont know enough about your current circumstances and future long to middle term goals.

Iguess you havent worked on that bit as yet, because the answer you are looking for would come from that.

If you are dealing lender direct or via a broker, ask them what they recommend and why, that ay give you some further insight

PS, I dont like STG either, BUT they have their place, and from a structuring growth portfolio Point of view it could be worse, you could be with NAB or AMP

t
arolf

 

[Shahin_Afarin]

1. Don't do top up - create a separate and unique loan account so that you don't contaminate the interest.

2. Do an upfront val to see exactly how much equity you have against the properties.

3. Depends on how aggressive you are wanting to go after the carramar purchase but going to 90 or 95% on the below purchase price is not a bad thing per se. If the purpose is investment then the LMI premium is tax deductible for the first 5 years or the life of the loan - whichever happens quicker.

4. Don't go with St George

 

[jonmardell]

Hi smart people, have to approach some lenders this week about following;

1.Recently approved top up loan against Macquarie Fields NSW ip worth 250k about 130k owing to St George.

St George will release about 40k at an 80 % lend to buy 2nd ip, also 30 k available in redraw .

2.Renting cheaply in cabramatta 2 bed $240 ,owner raised rent for first time (roof leaking now fixed) in 3 years to market value .

3.Want to stay in area so placed deposit on Carramar NSW 3 bedroom unit 245k . Should rent about $370 after some tidy up minor reno.

My questions are should/can i still grab 40 k against 1st ip , and borrow $196 k to make Carramar an 80% lend avoiding lmi?

Please consider i have to live in Carramar property for maybe 1 year to fix up.

Should i take out Carramar loan with second bank? StGeorge staff assured me loans not cross x.
Thanks for any advice

If you can get 70K from your existing property you have enough to borrow 80% against the new purchase. Your contribution to keep the loan at 80% plus costs (govt costs) would be around 57K. If you plan on buying another property in the next year or 2 then you might be better off borrowing up to 90% and paying the LMI to leave some extra funds for the next purchase. You might have paid LMI on your existing loan that could be used to reduce the LMI on the new loan. You can go with St George and not cross X the properties if you submit a separate application. The benefit of staying with the current lender may include reduced LMI if you have already paid, reduced fees and a better rate. You can get upfront valuations for the current property through a broker.
Thanks
Jon

 

[magpie season]

If you can get 70K from your existing property you have enough to borrow 80% against the new purchase. Your contribution to keep the loan at 80% plus costs (govt costs) would be around 57K. If you plan on buying another property in the next year or 2 then you might be better off borrowing up to 90% and paying the LMI to leave some extra funds for the next purchase.
Thanks
Jon

Thanks Jon that was my plan , i have been quoted by STG approx $3500 to take topup to 90%.

That will release a further 30k to purchase again later

I did pay LMI for the first loan in 2004 . Can i still use that LMI ?

 

[jonmardell]

yes, they will calculate the new premium and take the amount you already paid off that. With st george you can also negotiate rates.

Thanks Jon that was my plan , i have been quoted by STG approx $3500 to take topup to 90%.

That will release a further 30k to purchase again later

I did pay LMI for the first loan in 2004 . Can i still use that LMI ?

 

[starter]

PS, I dont like STG either, BUT they have their place, and from a structuring growth portfolio Point of view it could be worse, you could be with NAB or AMP

t
arolf

What are the issues with NAB or AMP Rolf? NAB I assume is because they have high servicability so should be saved till last if possible.

 

[Peter_Tersteeg]

What are the issues with NAB or AMP Rolf? NAB I assume is because they have high servicability so should be saved till last if possible.

That tends to be where they fit quite well in an extended strategy. Both are great compared to other lenders when servicing is tight. They also have quite good policies around things like cash out and mortgage insurance requirements.

They also have their quirks however. There's points in a timeline and niches where they don't work so well, so it's difficult to give a specific answer to a general question.