Bridging loans

[sparky23]

Can anyone tell me about any decent bridging loans that may be around?

I have a client who may possibly need one but his financial lady has told him that it will cost him $11,000 to establish something, is this the kind of cost involved with these short term loans? I have seen them advertised with interest rates similar to regular loans but realise they have to make their money somewhere.

 

[allblack]

Can anyone tell me about any decent bridging loans that may be around?

I have a client who may possibly need one but his financial lady has told him that it will cost him $11,000 to establish something, is this the kind of cost involved with these short term loans? I have seen them advertised with interest rates similar to regular loans but realise they have to make their money somewhere.

I'm organising one for myself with CBA at the moment. Interest rate 5.04% same as my other wealth package loans. No fee apart from the annual wealth package fee. 12 months to sell my original PPR property. It works out cheaper to stay in my own home while I build compared to selling and renting for 12 months.

 

[sparky23]

Well it looks like a massive rip off, just been surfing a few sites and from what I can see it looks fairly straight forward and doesn't seem to cost much at all!

 

[sparky23]

I'm organising one for myself with CBA at the moment. Interest rate 5.04% same as my other wealth package loans. No fee apart from the annual wealth package fee. 12 months to sell my original PPR property.

Thanks for that this is pretty much as I have been finding out on-line, I must make sure my client doesn't get ripped off!

 

[Rolf Latham]

Hiya Sparky

Could be she is short on equity and needs a bunch of LMI ?

ta
rolf

 

[Kristine..]

Hi Sparky

The 'financial lady' may be a very responsible broker, intent on telling the truth and making sure the borrower is aware of the holding costs

Some Bridging Finance models allow for capitalisation of up to 9 months of interest. The borrower can pay the interest separately if they have the cash flow to service two mortgages, or they can elect to pay one mortgage and capitalise the other.

Serviceability is calculated on the 'end debt', that is, the mortgage expected to continue past the sale of the relinquished property.

So the financial lady may be presenting the cost of the capitalised interest as being approximately $11,000 for the deal.

Managing Customer's Expectations is very important with financial matters to make sure that they are not biting off more than they can chew

Cheers
Kristine

 

[sparky23]

Thanks guys.

It is an older couple who no longer work they will be paying a $260,000 deposit and placing their home on the market it is worth approx $350,000 with only $20,000 owing so they will have lots of equity as they only need $200,000 to complete the sale. I am giving them a long settlement and their home is in FHB price range plus an area that is popular so I think the loan will be unnecessary. If they need to rent the old house out it should make $300 -$350 per week so servicing would be fine plus they have other incomes anyway.

I have a problem as their advice is coming from a lady at retireinvest who has also suggested that they should conceal things from centrelink and I am considering what should be done about someone who suggests that a client should do something like that. They are also losing approx $40,000 every month through retireinvest at the moment and I don't know whether that is a situation that can be changed for them. She told them the $11,000 was the fee upfront for this arrangement but I am wondering whether she is going to a regular bank for this and who knows whether kickbacks are involved.

 

[Rolf Latham]

Hiya Sparky

I dont know about the soft data on that deal, but Id recommend they seek some alternate advice real quick.

Personally, Id not been keen to take mortgage advice from someone thats proposing I defraud the government on other issues ........


PS................I dislike the word Kickback immensely because of the wod pictures it draws.........but in this instance its possibly a very appropriate word

ta

rolf

 

[Peter_Tersteeg]

From the sounds of it I'd suggest they simply approach the lender who's got their existing home loan. As you suggest they probably won't need a bridging facility at all, but with their equity position I'd be amazed if their current lender can't do something for them - assuming they're using a balance sheet funded lender.

 

[sparky23]

Sorry Rolf I don't like the word kickback either but as you say it could well be appropriate here. Does anyone know whether it is possible to escape retireinvest or once they have peoples money is it trapped until it all disappears?

 

[Qlds007]

And you wonder people distrust Financial Planners.

Dont tell me the lady from Retireinvest has just emigrated from the US of A where she was a funds manager for Bernie Mahoff.

 

[sparky23]

Ha Ha!

Do you know whether they can or should try to extricate themselves from Retireindebt? How do you like the new name?

 

[Spectre]

If the broker isnt getting anything out of it at the end - as with bridging with no end debt doesnt put food on the table (leaving off referrals etc etc - I'm just talking about a one off)

I'd charge something as well but $11k as a fee is a bit rough.

 

[Bradsdad]

If the broker isnt getting anything out of it at the end - as with bridging with no end debt doesnt put food on the table (leaving off referrals etc etc - I'm just talking about a one off)

I'd charge something as well but $11k as a fee is a bit rough.

Either that or point them in the right direction for next to no output.


In regards to getting out of Retireinvest I have no idea Sparky. they should be able to get some free (initial) advice from their current banker in regards to this. Do you know who their banker is?

 

[sparky23]

No and of course its not my place to give them financial advice but they are such a lovely old couple, I hope their money isn't all going to disappear - they might be better off stashing it under the mattress.

Anyway I got a selling agent to look at their house for them yesterday and he says he can get them a sale very quickly in the current market so at least they shouldn't have to wear any costs for a bridging loan.