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HI All,
Did you know that when you go to apply for a new loan for investment
purposes that the banks(NAB atleast) assess it buy doing the following:
An Interest Only loan is based on paying P&I payments in terms of
affordablity(DSR for those in the know).
In other words if you want to borrow 200k over 25 yrs @ 6.5% then they will
consider your payments as being ~$1350/mnth for a P&I loan as appossed to
~$1083/mnth for an IO loan. This has serious impacts in terms of cashflow.
Now that's not the end of it. If your application to purchase this IP is
based on taking a IO loan at the start, then they will make it even harder
for you by considering it as making P&I repayments over 20 years instead of
25 yrs.
To avoid this, because your DSR is an issue. You need someone on the inside
(of the bank that is). Hence, why it is so important to have a good
relationship with your banker or broker.
They will process your application based on it being P&I to start with. Once
"head office" has approved the funds then you can get it changed to IO.
This is my opinion only and I would expect that all other banks/non banks
will differ for one reason or another.
If anyone knows better then please step forward. I would like it to be
proven otherwise.
Thanks
Darren
****************************************************************
IMPORTANT
The information transmitted is for the use of the intended
recipient only and may contain confidential and/or legally
privileged material. Any review, re-transmission, disclosure,
dissemination or other use of, or taking of any action in
reliance upon, this information by persons or entities other
than the intended recipient is prohibited and may result in
severe penalties. If you have received this e-mail in error
please notify the Privacy Hotline of the Australian Taxation
Office, telephone 13 2869 and delete all copies of this
transmission together with any attachments.
****************************************************************
HI All,
Did you know that when you go to apply for a new loan for investment
purposes that the banks(NAB atleast) assess it buy doing the following:
An Interest Only loan is based on paying P&I payments in terms of
affordablity(DSR for those in the know).
In other words if you want to borrow 200k over 25 yrs @ 6.5% then they will
consider your payments as being ~$1350/mnth for a P&I loan as appossed to
~$1083/mnth for an IO loan. This has serious impacts in terms of cashflow.
Now that's not the end of it. If your application to purchase this IP is
based on taking a IO loan at the start, then they will make it even harder
for you by considering it as making P&I repayments over 20 years instead of
25 yrs.
To avoid this, because your DSR is an issue. You need someone on the inside
(of the bank that is). Hence, why it is so important to have a good
relationship with your banker or broker.
They will process your application based on it being P&I to start with. Once
"head office" has approved the funds then you can get it changed to IO.
This is my opinion only and I would expect that all other banks/non banks
will differ for one reason or another.
If anyone knows better then please step forward. I would like it to be
proven otherwise.
Thanks
Darren
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