Best finance deals need help

[Dragon]

I think your best chance is to talk to your lender that your business accounts are with now.

Your request to discount rates and fees need to be supported as a value proposition, and if you already have a profitable relationship with an existing lender, that would be your best chance.

If not, you need to make a case to a new lender as to why you whould be given preferential treatment and why it benefits both parties.

As many have already commented, you want to get the lowest rate, but be wary of the hidden fees and charges from the smaller players.

Good luck with it.

 

[Qlds007]

I think this also goes for the bigger players as well.

be wary of the hidden fees and charges from the smaller players.

 

[josko]

Hiya

As an aside, mixing personal (PPOR) OR investment and business mortgages/ banking facilities with the same lender would not be regarded as sensible asset protection measures.

Best to separate your day to day banking for the business from any personal investment.

ta
rolf

I could not agree more with this strategy.

Another tip, BigBucks - Do your research on X-Collateralisation.

Regards JO

 

[Bradsdad]

I think your best chance is to talk to your lender that your business accounts are with now.

Your request to discount rates and fees need to be supported as a value proposition, and if you already have a profitable relationship with an existing lender, that would be your best chance.

If not, you need to make a case to a new lender as to why you whould be given preferential treatment and why it benefits both parties.

As many have already commented, you want to get the lowest rate, but be wary of the hidden fees and charges from the smaller players.

Good luck with it.

Don't the smaller players quote all their fees and charges in a fees guide just like the majors? The last time I went for a walk down the local shopping strip I didn't notice any of the majors advertising their fees in the front window.

 

[Dragon]

Agree. I may not have worded that one the best.

I was suggesting that a small player advertising a rate of below 5% will most likely have fees or charges to make up for the loss of interest income. ( Eg an intro rate converting to a standard variable with no discount and hogh penalties to refinance )

I was suggesting that he compare apples with apples , and if a discount was being sought based on relationship, then perhaps his existing banker would be the best place to start instead of a scattergun approach.

 

[bettedavis]

You'll need LMI for over 80% lend. If you have available equity in family home this may assist in keeping it to 80%. I personally would be looking at doing it as stand alone, utilising equity as a seperate facility. This is for both tax purposes and a little more freedom down the track possibly.


Regards
Steve

Hi Steve.

I plan to buy IP and PPR together, and finance brokers advised to set up a combined loan to reduce LVR so as not to pay LMI.

Can you please elabourate what you meant by tax purpose and more freedom?

I thought the tax benefit for IP interest would be the same regardless it is separate or combined with home loan (?)

Thanks

 

[Qlds007]

I think what Steve is eluding to is that the loans should be separate and not cross collateralised.

Rather than borrow 100% + costs using both properties as security for the 1 loan you would be better off to split the loans separately.

Take out an investment Line of Credit on your PPOR to say 80% of the valuation sitting in behind your current Interest only or P & I home loan and then use this to fund the 20% deposit plus acqusition costs.

A new interest only loan to 80% of the purchase price is then taken on the standalone investment property.

As the value of the IP increases you increase the loan accordingly and use the funds to pay down the LOC.

Linking the 100% offset account to your PPOR loan reduces the interest charged and should down the track you ever decide to rent the property out and purchase a new PPOR retains the tax deductability of the interest.

Of course there are sometimes ocassions where cross collateralising the loans is required however this is rare and i am suprised any experienced Broker recommending this as first course of action.

 

[Bradsdad]

Yes Richard, in general that's the way to go. Obviously without all info to hand I'm not saying definitely but almost definitely


Regards
Steve