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medico loan - can anyone help?

Discussion in 'Property Finance' started by Danielt25, 7th Oct, 2015.

  1. Danielt25

    Danielt25 Active Member

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    Hi, I have an off the plan IP settling in December and looking for finance, 80% LVR - want to borrow $528k
    Went with Loans.com.au for a recent IP purchase, but given APRA's tightening, I wonder if a "medico" package loan is now the way to go.
    Self employed medico, tax returns/NOA showing taxable income $1m+

    Thanks in advance.
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    With that sort of income you should not have a problem servicing (depend on other debt).

    The main difference with medico is the waiver of LMI over 90% - servicing is still the same.
     
  3. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker

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    Is there any reason why you are not taking advantage of your medical status and going 90% no LMI with a lot of the lenders (CBA, Westpac, Macquarie, NAB, St George, etc)?

    Rate is one thing but keeping $52,800 is another.
     
  4. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    As above, retention of capital is the primary benefit for medico waiver - the more you can keep available for further investing the better.
     
  5. Darlinghurst Boy

    Darlinghurst Boy Well-Known Member

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    My Psychiatrist earns 10k a week he was telling me, so theres miney to be made in the medical profession !
     
  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    depends if rate is the important thing over risk management

    ta
    rolf
     
  7. Jamie_

    Jamie_ Well-Known Member

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    It all makes sense now.
     
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  8. Kangaroo

    Kangaroo Well-Known Member

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    DanielT25, Is it an apartment or house ? which suburb ? If it is an apartment around 600K, I think it would be an mistake from investment point of view. If it is a house and land package, what is the typical old house sold for ? Negative gearing is not that important, it is way better to pay due tax than negative gearing it.

    Since you are a GP or Specialist, all banks will chase after you to give you "free" money like mad. For you the structure of the loan is much more important than the rate.
     
  9. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Possibly.....but not enough info to provide a decent response.

    Cheers

    Jamie
     
  10. Bran

    Bran Well-Known Member

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    Hi Daniel

    Medfin will throw money at you. 95%, no LMI.
    Their current rate was 4.39% (when I bought a car 2 weeks ago, and a house in Feb).
    Be careful though - there is no offset account, and you have to pay it down (P+I) to 90% within 3 years before you can go interest only.
    This worked for me at the time of my last IP, but will use a broker (again) for refinancing/future financing as I think the overall structure and strategy is a bit more important.
    Medfin do make it very very easy.

    Care to share any details? Most of us are wary of OTP.
     
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  11. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker

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    Plus they have a crappy policy whereby they don't allow for valuations within 12 months of purchase equity release unless you get credit exception.
     
  12. Danielt25

    Danielt25 Active Member

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    Thanks, I'll have a look at this LMI waiver and see what rate I can get
     
  13. Bran

    Bran Well-Known Member

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    I didn't know about this. Any idea what happens if I exit within say 6 months?
     
  14. Mick C

    Mick C Well-Known Member

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    Given your income level and tax...i would say leverage the loan as much as possible...so 90% No lMI makes sense in this case.

    In-fact you can even go to 95% and possibly 100% LVR with NO LMI given your income level
     
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  15. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker

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    Nothing other than a $400 discharge fee.
     
  16. Danielt25

    Danielt25 Active Member

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    Thanks. To go to 95% or 100% LVR with no LMI - will that generally incur a big interest rate hit / "penalty"? ( compared to sticking with 90% LVR).
     
  17. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker

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    95% is a blended rate and they will request you go on P&I repayments. I would stick with 90%.

    Medicos do have some creative lending options in which they can borrow against their cash-flow.
     
  18. Mick C

    Mick C Well-Known Member

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    90% no lmi is the "cheapest " rate under 4.35%.

    95%-100% it will be a blended loan,, so average out to be ~4.45% -4.70% depending on your loan amount. Ie 90% of the loan will be 4.35% and than the remaining 5% will be 4.90%.

    ^ Generally we refinance ppl out after 12-24month depending on CG, to the lower rates etc if possible ( but given this environment it will be more likely 18-36 month)...