Calling Rolf

From: Bruce Graham


G'day Rolf,
A fellow worker asked me to contact you regarding loans.He does not own a computer.I print out what I think will
interest him.You did, so here's his question
- has three properties, value $450,000.
these properties carry debt of $220,000.
His equity is $230,000.The banks say no more borrowings.
Unfortunately that answer doesn't impress him.He wants to borrow for another property.
It's been awhile since his last loan so he is keen to go again.
Can you help Rolf?
Bruce G.(Sydney)
 
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Reply: 1
From: Rolf Latham


Hi Bruce

Your friend has a number of options:

1. take the hint from the lenders that they feel he is overexposed (im not being rude, as long as he knows what hes doing :eek:. Obviously its a serviceability issue.

2. Not all lenders lend the same amounts NOR assess identical deals in the same ways. Shop around or use an independent broker, theres a few here now.

3. Use a no docs lend.

4. Use an annuity based system aka the Steve Navra Hamburger.

Ta
Rolf



Rolf
 
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Reply: 2
From: Gail H


Hi,

I'm not Rolf (obviously) but I know that Resi have a pretty good low doc loan - they'll lend 75% of the asset and the rate is 6.9%. Pretty good for a low doc loan I thought. They basically don't care what your debt servicing ratio is, but it doesn't apply to the seriously credit impaired. Which is not to say that your friend might not get more money without going low doc, but it isn't a bad option if he he does hit a wall.

Gail
 
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Reply: 2.1
From: A Jones


Hello Gail and all mathematicians,

I am having trouble solving the following equation based on Resi's 75% asset lend.

I would like to calculate what I can spend on an investment property.

Assume I have a house valued at 500k with a mortgage of 200k. I wish to buy an investment property Y such that my new LVR over both assets becomes 75%.

What will be the maximum purchase price of my investment property (excluding stamp duty and all other variables from the calculation)?

I really need the formula and the maths problem solved in terms of X and Y.

Ajax
 
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Reply: 2.1.1
From: Rolf Latham


Hi Ajax

Lo doc over home 75 % LVR LOC.

This releases 175 k for a deposit for an IP.

So set aside 25 k aside for costs and based on a 75 % LVR you can use 150 as a deposit and you could theorically purchase a 750 k prop.

Be aware though that most no docs lends have maximum single loan or aggregate per entity of 500 k. Suncorp will go to 750 per enitity with rates as low as 5.9ish at 80 % LVR, albeit P&I. This applies in Syd and Melb only.

Ta

Rolf
 
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Reply: 2.1.1.1
From: A Jones


Thanks Rolf.
 
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Reply: 2.1.1.1.1
From: John P


Hi Bruce, RESI's Consumer Lo Doc Loan that Gail was referring to supports a lend up to 500K at a rate of 6.95%. It sounds to me as though it may be worth exploring other options first. The manner in which lenders check the client's ability to service the loan may mean that your friend could still get across the line with a more standard and more cost effective type of loan product.



John Poulos
RESI
0412 588986
 
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Reply: 2.1.1.1.1.1
From: Tim Willis


please excuse my ignorance regarding Low doc loan. What does the term Low
Doc mean.

Thanks in advance, - Tim
 
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Reply: 2.1.1.1.1.1.1
From: Rolf Latham


Hi Tim

Simply put, it means that income proof is not required. For most of these loans you sign a declaration that you can afford the loan. Obviously the LVRs will be lower than standard lending and the rates tend to be a little higher

Ta

Rolf
 
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