Advice needed! First investment loan

Discussion in 'Loans & Mortgage Brokers' started by YeLe, 13th Feb, 2020.

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  1. YeLe

    YeLe New Member

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    Hi Members,

    I am starting my investment journal and I am all new to this, so my question might sound a bit silly.

    I am asking a mortgage broker to find out about my borrowing power. They have given me some advice but I never had a mortgage loan before so I am not sure if I should trust or even follow their advice.

    They said if I apply for an Owner Occupier Loan, I will be able to borrow more compared to Investment Loan, and cheaper rate, and I can apply for stamp duty exempt as my budget is $550k max (I am based in VIC). After that I can live in there for 6mths and later rent it out as what I originally planned to do with this investment property, but I don't need to notify the bank that this property is now using as an investment, no longer PPR anymore.

    What is your thoughts?
    As I said I had no previous experience in investment property so I don't know what is within the 'should' and 'should not'

    Thank you so much
     
    YeLe, 13th Feb, 2020
    #1
  2. Trainee

    Trainee Well-Known Member

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    How do you know anything you read here will be right or wrong though?

    some self education first. Read lots.

    there are always multiple ways to do things. In your example, what if you just dont want to move into it at all?
     
    Last edited: 13th Feb, 2020
    Trainee, 13th Feb, 2020
    #2
    Lindsay_W likes this.
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Not something I would suggest to a borrower since its a breach of their loan agreement in almost all cases.

    Almost all contracts I have ever seen demand agreement to notify if converting to IP

    ta
    rolf
     
    Rolf Latham, 13th Feb, 2020
    #3
  4. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    One thing you've gotten wrong. To be eligible for the stamp duty reduction you need to move into the property within 12 months of the settlement. You need to live in the property for 12 months, not 6.
     
    Peter_Tersteeg, 13th Feb, 2020
    #4
  5. Lindsay_W

    Lindsay_W Well-Known Member

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    What's your investment strategy? Do you NEED the additional borrowing capacity an Owner Occupied loan will give you?
     
    Lindsay_W, 13th Feb, 2020
    #5
  6. Dilshan2020

    Dilshan2020 New Member

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    Hi,

    I'm going to build a house and it is 230,000 but as I have savings I asked bank loan for 200,000.
    I have paid 5% already. Can i know how much will bank pay for progress payments. which stage should I pay the difference.

    Thank you.
     
    Dilshan2020, 10th May, 2020
    #6
  7. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    lenders will retain all their money until the difference is paid by the borrower

    so I estimate 230 X 5 % = 11 500 already paid by you

    230 - 200 = 30 k borrower contribution

    So 30 - 11.5 = 18.5 k payable by you before the lender usesany of their cash

    ta

    rolf
     
    Rolf Latham, 10th May, 2020
    #7
  8. Dilshan2020

    Dilshan2020 New Member

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    Thank Rolf,

    Thanks means do i want to 18K for bank or builder. Please let me know.

    But my broker said that i have to pay that in second stage. I'm confuse.

    Cheers.
     
    Dilshan2020, 10th May, 2020
    #8
  9. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Cools, its not simple stuff, so not surprised about the confusion

    I dont have all your data, in fact only basics :)

    The 18 k will be paid to the builder, they will issue a receipt and from then on will issue invoices, which the bank will progress pay

    Who is the lender pls ?

    ta
    rolf
     
    Rolf Latham, 10th May, 2020
    #9
  10. Dilshan2020

    Dilshan2020 New Member

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    Thank you.

    Now make sense. Lender is ANZ.
     
    Dilshan2020, 10th May, 2020
    #10