Can you borrow the buyers agent fee?

[Noodle]

Hi,

Just read the thread re Buyers Agents fees being added back to the cost base for tax purposes, which got me thinking.

Does that mean lenders will fund buyers agents fees as part of the overall loan, like stamp duty, LMI and legals fees etc, or do the buyers agents fees have to come off the actual cash deposit, therefore reducing borrowing capacity?

Hope the above makes sense.

Noodle

 

[Peter_Tersteeg]

Hi,

Just read the thread re Buyers Agents fees being added back to the cost base for tax purposes, which got me thinking.

Does that mean lenders will fund buyers agents fees as part of the overall loan, like stamp duty, LMI and legals fees etc, or do the buyers agents fees have to come off the actual cash deposit, therefore reducing borrowing capacity?

Hope the above makes sense.

Noodle

No.

Lenders don't fund buyers agents fees, or stamp duty and legals. Under limited circumstances lenders may add LMI to the loan.

Essentially lenders will lend a percentage of the value of the security property. For practical purposes with investment properties the maximum you can borrow is 90% of the value (95% is available in limited cases).

You can't add the stamp duty and other purchases costs on top of the 90%, nor buyers agent fees.

You can take an equity loan against another property to cover these costs. The LVR on the loans against that property must stay within acceptable limits. For some reason, many people don't seem to think that a LOC is just another loan. It is.

 

[Noodle]

No.

Lenders don't fund buyers agents fees, or stamp duty and legals. Under limited circumstances lenders may add LMI to the loan.

Essentially lenders will lend a percentage of the value of the security property. For practical purposes with investment properties the maximum you can borrow is 90% of the value (95% is available in limited cases).

You can't add the stamp duty and other purchases costs on top of the 90%, nor buyers agent fees.

You can take an equity loan against another property to cover these costs. The LVR on the loans against that property must stay within acceptable limits. For some reason, many people don't seem to think that a LOC is just another loan. It is.

Thanks Peter. That makes a lot of sense and would be where I have my wires crossed.

 

[Finance Guru75]

No; however, the way this can be accommodated in practice is that stamp duty will come out of your cash deposit while the loan amount will increase to compensate. As an industry standard, borrowers require at least a deposit of 10% to add stamp duty and a Lenders Mortgage Insurance (LMI) fee onto the principal of the loan

 

[Terry_w]

Yes you could borrow to pay buyers agents fees and the interest could be deductible, but you need the equity to do this.

 

[Jamie M]

Hi,

Just read the thread re Buyers Agents fees being added back to the cost base for tax purposes, which got me thinking.

Does that mean lenders will fund buyers agents fees as part of the overall loan, like stamp duty, LMI and legals fees etc, or do the buyers agents fees have to come off the actual cash deposit, therefore reducing borrowing capacity?

Hope the above makes sense.

Noodle

You could borrow it as part of the equity release for the deposit/costs.

Cheers

Jamie

 

[Marty McDonald]

Or add it to your cross collateralised loan of 110% but don't.

 

[Jess Peletier]

Or add it to your cross collateralised loan of 110% but don't.

Haha!

 

[Rolf Latham]

Or add it to your cross collateralised loan of 110% but don't.

Spoil sport

the anti cross coll bot has been activated

ta

rolf

 

[Colin Rice]

Or add it to your cross collateralised loan of 110% but don't.

Yeah, Nah

 

[Moneyman_85]

How about a personal.loan? Is that deductable?

 

[Terry_w]

How about a personal.loan? Is that deductable?

s 8-1 = It coulld be, depending on a few things.

 

[Peter_Tersteeg]

How about a personal.loan? Is that deductable?

If you use it for investment purposes, the interest would likely be deductible in the same manner as a mortgage may be deductible.

The challenge with a personal loan is the banks will see it, decide you've borrowed it for stamp duty or deposit and then possibly decline the mortgage application. Using personal loans for funding property isn't very appealing to lenders.

 

[Colin Rice]

The challenge with a personal loan is the banks will see it, decide you've borrowed it for stamp duty or deposit and then possibly decline the mortgage application. Using personal loans for funding property isn't very appealing to lenders.

I had one lender with a non genuine savings product tell me they dont care where the funds come from as long as its not stolen. They used the same banks credit card towards some costs so he wasnt exagerating.

 

[Corey Batt]

I had one lender with a non genuine savings product tell me they dont care where the funds come from as long as its not stolen. They used the same banks credit card towards some costs so he wasnt exagerating.

Also some mainstream options too - did one recently for a client at 90%, BDM confirmed prior that they are happy for it to be an unsecured loan, as long as it's all disclosed in A&L.

 

[Colin Rice]

Also some mainstream options too - did one recently for a client at 90%, BDM confirmed prior that they are happy for it to be an unsecured loan, as long as it's all disclosed in A&L.

This was a mainstream lender, St George

 

[Peter_Tersteeg]

I had one lender with a non genuine savings product tell me they dont care where the funds come from as long as its not stolen. They used the same banks credit card towards some costs so he wasnt exagerating.

Also some mainstream options too - did one recently for a client at 90%, BDM confirmed prior that they are happy for it to be an unsecured loan, as long as it's all disclosed in A&L.

* Outside DUA
* Credit scoring

Personal loans for funds to complete can be done, but you've got to tread carefully.

 

[Moneyman_85]

I meant personal loan for the BA fee.

 

[Moneyman_85]

Hook me up Colin, 100% loans he we come