Q: As a young investor, what bank is the most accessible for a home loan for an investment?
A: Hi Tom, as an investor you should be thinking purely about the right investment which will make you the ROI you desire i.e. capital gains or yield or both. I have been a lone wolf investor in early years and I can tell you it doesnt work as your knowledge base is limited. So higher a buyers agent, mortgage broker, solicitor who will review your contracts before offers and above all a mentor.
To answer your original question, banks are very much all the same from funding stamp point, I have seen in the past Macquarie were more generous with how much they would lend but due to APRA regulations they are all have very similar lending criterion. Rates may vary depending on your LVR and property type.
Q: I got pre approved for a $420,000 home loan 6 months ago and now the bank say I can only borrow $390,000. If my situation is the same how can the bank change their mind like this?
A: Hello Jack, most banks have recently moved to Henderson method of living expense calculation which increases your minimum living expenses if your household income is high. So it is good time to speak to your broker to see which bank will lend you the mosy. Regards Harish
Q: Do all lenders for a home loan require that your deposit be made up of savings or can it be part or full cash?
A: Hi Bill, Lenders want to ensure with the genuiene savings that you have a goos track record to save money out of your salary so that when you get a homeloan you dont end up in bad debts. Most lenders except for non-conforming once expect savings.
There is another way to work around the genuine savings hurdle if you had a rental lease recently on your name and been paying continuous rent for 3-6 months, that rental statement can be presented as a proof of good savings history. Cheers Harish
Q: How much lower could rates go this year? Will fixed rates fall in line with the cash rate if it drops further?
A: Most economist are expecting cash rate to be at 1% this time next year. As an economy we are in a good spot as we still have room to move on our Fed rates to apply some upwards pressure on economy from a Monetary policy stamp point. Cheers Harish Saluja
Q: What types of facilities are available to borrow money to use for share trading/investing? Do I need to give property equity, or will the shares be sufficient as collateral? What is the cheapest option to ensure the greatest overall result back to me?
A: CBA margin loan is definitely a great choice and shares are colletral, but last i checked they were doing only 50% leaverage, interest rates can be negotiated directly with Commbank rep 😊
Q: Hi has anyone had any dealings with U- Bank? Good or bad? Im thinking about refinancing my home loan with them for their online rate of 3.74%.
A: Hello Di, It really depends on your objectives from your property purchase. Cheapest rates might not be the best product and best products in the market might not have the cheapest rates. So if your objective is to have a property investment portfolio in the future its best to form a good relationship with a big bank. To answer your question I have not heard anything bad about Ubank as long as customers are happy with a restricted banking option. Cheers Harish Saluja
Q: If you have a variable home loan and interest rates increase, does your repayment amount stay the same and just the interest portion of the repayment amount increase?
A: Fluctuation in interest rates will change your entire amortization schedule i.e. velocity at which you are paying off your home and it will adjust it to ensure you are using your full term 30yrs in most cases. Cheers Harish
Q: I'm looking at buying a franchise, is it best to pay cash or obtain a business loan?
A: Its a good idea to get a franchise loan if you have a strong franchise model. Banks are generlly very generous when you buying a franchise if you need money in future it will be classified as capital raising.. moreover your previous franchise owner would have strong balance sheet for the last two years as they want to off load the business at a high point, Banks will look favourably on those numbers 😊