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From: RM .

TW, Michael,

When I saw this post,my thought was - hey that's easy. I then stopped and did a reality check!!!

What is creative financing??

I think the answer to this question has its roots in what is wrong with normal financing that gets most property investors seeing red with the major lenders.

Ok, how about this....

I have a sworn valuation by a valuer that the lender uses for $100,000. Why won't the lender advance me 90% of the value without Lenders Mortgage insurance? The risk to the lender should be less because of their own valuer.

I want to buy a rental property that an agent has said will return $200 per week. Why does the lender recognise ONLY 60% of the rent?. If I don't get the quoted rent who loses?

I can service a large IP loan? Why does the hoop of fire you have to jump through suddenly become more difficult when you want to borrow more than $500K, more than $1 million etc? Isn't the loss of risk the same ie 80/20 rule?

Lending rates are at historical lows. Money is cheap. Why then do major lenders use lending reference rates in excess of the 5 year fixed rates you can get your loan at?

Why do major lenders not take into account the after tax position of IP's even if it meant you had to go to one of their own "qualifying accountants" for confirmation?. What, they don't have access to clever accountants?

Why do some lenders loan money on the Reserve Bank Bill rate and then add a "customer premium"? Why can't ALL AAA rating property investors get money at close to that rate?

Why is it that most investors with borrowings well in excess of the mums and dads investors pay the same interest rates?

On extended settlements, why do major lenders not take into account the time value of money? That is, they know the inflation rate, they should be able to reasonably predict the value at settlement time. Hell, they can work out the time value of an interest rate in five years time with fixed rates?

I think if someone could address or even solve some of these issues, I think you would be able to call it creative financing?

So TW, how long before the Freestylers Bank is in operation? I would like to be your first customer.

Thanks for your wisdom.

Thanks RM.
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