Refinanced LMI as Tax deduction

[Rolf Latham]

Hiya

depending on the clients brief there may be other reasons youd want to hoik them out of NAB and into CBA or ANZ. These would be primarily serviceability and future structure related.

If the OP has already paid a bunch of LMI to NAB, then id agree with PT...........unless some logic as above applies.

In terms of the dip of financial mgt and being a Senior Broker, not being rude...............I have an honours degree in Rocket Science....................ok ok so Im 2 letters short

Rock Science = Geologist​

Unless your broker is a tax adviser/ tax agent then id be taking my tax query to a tax person

ta
rolf

 

[Aaron_C]

Agree with the others if you have already paid LMI with NAB, then stick with them and get a loan increase. Paying LMI once is bad enough, twice is really bad. BTW - B.Com, LLB (Melb.)

 

[Terry_w]

The broker sounds like a fool. Why would he boast about getting a diploma?

He is only trying to get increased commission by moving you to ANZ.
The LMI won't be deductible because it is a private purpose.
The loan will end up mixed purpose if you do what he suggests, and
The interest on the increase won't be deductible.

 

[Peter_Tersteeg]

What Brady said. Get NAB to match rates with a competitor; I know they'll do it because I've lost business to NAB under those same circumstances - NAB didn't want the deal, so we got finance elsewhere, on the eve of the refinance they came back with a counter offer.

I don't think the LMI is deductible either, but if your accountant says it is...

... and the diploma is a nothing qualification. Every broker's got one. The real proof of a good broker is in the advice you receive and how well they protect your interests. I have a degree in engineering; where people actually create something and solve real problems.

 

[Rolf Latham]

What Brady said. Get NAB to match rates with a competitor; I know they'll do it because I've lost business to NAB under those same circumstances - NAB didn't want the deal, so we got finance elsewhere, on the eve of the refinance they came back with a counter offer.

That is standard NAB training practice : )

We have all been there

ta
rolf

 

[Aaron_C]

What Brady said. Get NAB to match rates with a competitor; I know they'll do it because I've lost business to NAB under those same circumstances - NAB didn't want the deal, so we got finance elsewhere, on the eve of the refinance they came back with a counter offer.

+1 to that. Still not over it

 

[sam.baba]

Thank you All. Will definitely talk to NAB.

 

[sam.baba]

Discussion with NAB about Refinancing with them

Hi All,
Yesterday I went and spoke to my local NAB branch banking advisor about my idea to switch to another lender, and I told him the options I have got.
He then suggested refinancing with NAB where NAB would refinance at 95% and for a LMI premium of $3000.

Based on what he said when I did the calculation as per below,

Property Value-82.35% LVR $397,000
Refinance for 95% $377,150
LMI as per NAB - 3000
Current Loan Balance $326,732
Fund that will become available $47,418

I tend to get $47,418 from NAB compared to the fund that I will get from ANZ by paying higher LMI.

And as I and my wife are desperate to buy a house soon, I believe that I could use the above fund towards the cost of purchasing a house worth $400000.

The estimated cost to purchase a house worth $400,000 works out to be $50,300 that includes the following,
Government charges $17,000
LMI $13,000
5% Deposit $20,000
Considering the fund I got from refinancing, I will be only short of $3000, which is manageable.


Is my above plan a foolish plan? Am I rushing into things? Do I just do the refinancing first and do the preapproval in 3-4 months?

The banking advisor suggested I wait for a few months and save up some cash, which would obviously reduce my LMI cost.

I have been asked to come to the bank today with my wife to possibly put through both the refinancing and preapproval application for a new house.
Any advice would be much appreciated.

Hope I make sense.

 

[Terry_w]

Hi All,
Yesterday I went and spoke to my local NAB branch banking advisor about my idea to switch to another lender, and I told him the options I have got.
He then suggested refinancing with NAB where NAB would refinance at 95% and for a LMI premium of $3000.

Based on what he said when I did the calculation as per below,

Property Value-82.35% LVR $397,000
Refinance for 95% $377,150
LMI as per NAB - 3000
Current Loan Balance $326,732
Fund that will become available $47,418

I tend to get $47,418 from NAB compared to the fund that I will get from ANZ by paying higher LMI.

And as I and my wife are desperate to buy a house soon, I believe that I could use the above fund towards the cost of purchasing a house worth $400000.

The estimated cost to purchase a house worth $400,000 works out to be $50,300 that includes the following,
Government charges $17,000
LMI $13,000
5% Deposit $20,000
Considering the fund I got from refinancing, I will be only short of $3000, which is manageable.


Is my above plan a foolish plan? Am I rushing into things? Do I just do the refinancing first and do the preapproval in 3-4 months?

The banking advisor suggested I wait for a few months and save up some cash, which would obviously reduce my LMI cost.

I have been asked to come to the bank today with my wife to possibly put through both the refinancing and preapproval application for a new house.
Any advice would be much appreciated.

Hope I make sense.

I thought you were already with NAB?

 

[sam.baba]

Hi Terry,

Yes I am with NAB already, yesterday I went and spoke to them about getting refinance my existing home loan, which has got a balance of $326,932 and get the excess equity fund to utilize it towards a new home loan.

Thanks.

 

[Terry_w]

Hi Terry,

Yes I am with NAB already, yesterday I went and spoke to them about getting refinance my existing home loan, which has got a balance of $326,932 and get the excess equity fund to utilize it towards a new home loan.

Thanks.

A loan increase then? Refinance sounds like you are changing banks.

 

[sam.baba]

Hi Terry,

Yes I think that's the wording for it, sorry for using the wrong term.

 

[Aaron_C]

sam.baba - just be aware that NAB only goes to a maximum of 95% including LMI for the purchase. Consider going with another lender for the new purchase such as CBA or (heaven forbid) St George where they allow capping of LMI above 95% so you can preserve some cash.

Also, ensure that the NAB loan increase can go through. Usually for loan increases involving LMI NAB will require you to provide proof of where the funds are going. No point making offers when the money is not in the kitty or formally approved. Hope it goes well for you.

 

[sam.baba]

Hi Aaron,

Thank you for your reply. Based on what you are saying I think its better for me to just go ahead and get the loan increase done first, and once the funds are available try using another lender for the new purchase.

 

[tobe]

Hi Aaron,

Thank you for your reply. Based on what you are saying I think its better for me to just go ahead and get the loan increase done first, and once the funds are available try using another lender for the new purchase.

yes, get the loan increase done (you will need to provide evidence of the purpose of the further funds) and then walk this cash to another lender as the deposit for the investment purchase.

 

[Terry_w]

Ideally do the increase as a separate split

 

[Rolf Latham]

or (heaven forbid) St George where they allow capping of LMI above 95% so you can preserve some cash.

what, you want approval this year ???

Finally settled a complicated refinance...............7 mths after first application

many weird things incl a request from LMI to

1. Repair a cracked floor tile in a bath room in a place worth 300 k
2. Grade 4 enviro issue because of air pollution ( from traffic) on a Brissie suburb in a single lane road.
3. Not liking a ONE bedroom 85 Sqm cottage on the fringe of the CBD. They will do 28 sq dog box units, but be wary of good quality small housing stock:

Need I go one ..........

for a 90 % refinance : )


ta
rolf

 

[Aaron_C]

Sorry rolf - I did put the caveat 'heaven forbid'. I will bold and enlarge it next time when it comes to STG

 

[Rolf Latham]

Sorry rolf - I did put the caveat 'heaven forbid'. I will bold and enlarge it next time when it comes to STG

I was just elucidating your concerns

ta
rolf