Finance

[WebBoard]

From: Mike .


Re: Asset Based Finance
From: Dave
Date: 6/22/00
Time: 12:26:03 PM

Can you please elaborate upon this form of financing. As I'm now in a position of high equity, low income (high debt servicing ratio)

Cheers

 

[WebBoard]

Les

Reply: 1
From: Mike .


Re: Asset Based Finance
From: Les
Date: 6/22/00
Time: 6:29:03 PM

G'day Dave,

I personally can't help with names (don't have any yet). I do know it's "out there" and is referred to by Andrew G and others. Basically, it means the loan is made purely on the Capital value of the IP (and they loan at lower LVR's) but DSR then doesn't come into it.

I believe it may be possible to buy well (e.g. buy a $200k IP for $150k) and they will loan to say 70% of Value rather than purchase price. That means they will loan $140k and you're buying for $150k - so it becomes easier. I also believe their Interest rates might be a notch higher.

Sorry I can't be of more help - hopefully others with more experience might give a more complete answer. And correct me if I'm off base (there's a big difference between "I believe" and "I know" .... ;^)

Regards, Les

 

[WebBoard]

Stuart

Reply: 1.1
From: Mike .


Asset Based Finance
From: Stuart
Date: 6/24/00
Time: 9:04:03 PM

Les, I was talking to a finance broker the other day who mentioned RESI and GEM home loans. They both lend 65% of the value of any property to anyone who states that they can repay the loan. Costs $425 for a valuation and paperwork, interest rate 1/2% above prevailing rate. I was about to use them but I managed to convince my bank to lend me some more money so I dont need them yet.

If you find any that will lend 70% let me know for future reference.

Thanks, Stuart

 

[WebBoard]

David

Reply: 1.1.1
From: Mike .


Re: Asset Based Finance
From: David
Date: 6/25/00
Time: 11:25:24 PM

Stuart

I heard of a group called Morgan Brooks Group ( http://www.morganbrooks.com.au ) who will lend up to 76% on a no financials loan. Not to sure about the rates though.

Regards, David

 

[WebBoard]

Jane P

Reply: 1.1.1.1
From: Mike .


Re: Asset Based Finance - St George??
From: Jane P
Date: 6/25/00
Time: 9:10:29 AM

Hi Stuart/Les/All

I'm just wondering if you've had any experience with St George Bank? From my research, the fees and charges are standard, but they said they would lend me up to 90% of their valuation (of course - they would have to disclose this and I guess you could query this). Obviously this would incur an insurance. They would loan particularly against your other assets. I would be interested to hear from anyone who can share their knowledge of them (or other institutions for that matter).

Cheers, Jane P

 

[WebBoard]

Les

Reply: 1.1.1.1.1
From: Mike .


Re: Asset Based Finance - to Stuart and Jane P
From: Les
Date: 6/25/00
Time: 1:21:36 PM

G'day Stuart,

API magazine (April/May99) mentions such loans as available thru some solicitors - in the case in their story, they were talking 70%. But no firms quoted - it sounds like "they're out there" though.

Also, Andrew G alluded to similar in an earlier post (March/April 00) - sorry, I don't remember the name of the posting - and in that he referred to 75% being available from "out of the square" lenders. Check any posting submitted by Darren, and replied to by Andrew G - one of them will expand greatly on Asset Based Finance.

To Jane P - from the figures, I doubt that the loan quoted would be an example of this - at 90%, it sounds like the common or garden home or Investment loan where DSR is a major issue (and stumbling block for some). What I refer to as "Asset Based" is where the lender simply offers a loan based on the valuation of the property - they ask no questions re your ability to repay, and (of course) they don't lend to 90% typically. But if St. George ARE offering "asset based" loans, I would certainly be interested in knowing more (I doubt that they would be at 90% though..)

And of course there may be other names given to these loans (I've heard one group refer to them as "asset based" loans) - I stuck to using that name as it seems to tell it like it is.

Regards, Les

 

[WebBoard]

Jane P

Reply: 1.1.1.1.1.1
From: Mike .


Re: Asset Based Finance - to Stuart and Jane P - Back to les
From: Jane P
Date: 6/25/00
Time: 4:35:51 PM

Hi Les Yes, you're correct - I think what I was talking about is garden variety where it is very much means tested. I'm still investigating other such loan strategies as I'm sure we'll all wish to use a mixture in the future. Garden variety is fine if you have a job and assets, but, as we all know, you don't always need this to be able to buy IPs.

Cheers Jane P