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Q: i run my own business. I like cars and they are my golf membership! I buy 2-3 year old models and follow trade prices. i sell well & typically get close to what i paid (if not more) 12-18 months. have high deposits, 4-5 years & 40% residual. Extinguish within 18 mths. Use chattel mortgage. seeking a 2007-9 car, what options might exist for a little older car?
A: Hi Rohan,
My friends often laugh at the fact that I turnover cars in a similar time frame. Like you, I prefer someone else to take the initial depreciation hit.
There are couple of lenders that finance older vehicles, including pepper money. If you are turning over vehicles often, Alphera finance have a nil early termination fee and have a pretty flexible pre-approval process for your next vehicle purchase, but I'm not 100% sure about their policy on older vehicles.
I'm sure you already know this, but I think the useful life of a vehicle is only 7 years according to the ATO, so you may not me able to claim depreciation on an older vehicle if it's being used as a company car.
I have access to both the abovementioned lenders, let me know if I can be of any help.
Have a great weekend,
Gerry
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Q: hi, with a new investment property is now a good time to be fixing rates and can you fix an interest only loan?
A: Hi Michael,
You can definitely fix an interest only investment loan.
All four big banks have increased rates in the last week or so and they've weighted their increase towards investor loans.
I've recently put some comparisons together for two of my clients and both chose to fix as the rates available were really competitive.
Feel free to get in contact if you'd like me put something together for you.
All the best,
Gerry Ardesi
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Q: Cody has a motor vehicle worth $35,000, stock worth$16,000, and a computer worth $2,000. Cody also owes her suppliers $3,000, has a loan to the bank for $5,000, and owes her friend $500. What is the accounting equation suitable for this question?
A: Hi Ana,
I think you're looking for a balance sheet.
Cheers,
Gerry
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Q: Hi, I have a credit card debt of over $3000, and I'm studying a course where I have three more payments to make of around $500 each month. I've just relocated and my income has dropped significantly and I've almoat run out of cash totally and need to buy food. I'm a bit freaked out as i need to use my card for that too now
I don't want to ask family to lend me money. Any suggestions welcome?
A: Hi Anonymous,
Sorry to hear about your situation. Have you tried the Salvation Army?
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Q: Is it possible to use the funds from a personal loan as the deposit to get a home loan?
A: Hi Seb,
It's not something I'd recommend. Most, if not all lenders would not accept a personal loan as a deposit.
You also have to consider what impact this would have on your servicability/capacity to repay. Eg. If you personal loan repayments are say $500 per month, your total borrowings could be reduced by as much as $70K or more.
Judging by your current and previous queries, it would appear that you're pretty keen to get into the property market. Please feel free to get in touch, helping people get into the property market is one of the main reasons I'm in this game.
All the best,
Gerry
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Q: I am using a how much can I borrow calculator and want to know if I can include commissions and superannuation as income?
A: Hi Seb,
Standard policy for most banks will require you to show commission income over the last two calendar years, or two financial years. The kicker is that they will generally take the lower of the two values. There are other banks who will take your commission income received in the current financial year, and some will even look at it over the last three months. There are plenty of options, you just have to know where to look.
Per Daniels comments, unless you're borrowing through an SMSF super doesn't count. If you can't access those funds you can't use them as income.
Whilst this is a self-serving comment, in today's market, it's definitely a great idea to speak with a broker. We/they can help you extract as much value as possible and help you avoid some heartache.
Best of luck on your property journey!
Gerry Ardesi
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Q: What are your thoughts on the online real estate agents that offer flat rate fees instead of percentage of sale price. At first glance there appear to be massive savings, however what are the risks associated with these companies?
A: Hi Michael,
When I last sold a property I took some time prior to listing, to observe how each of the local agents performed. This was measured in a number of ways;
1. Who is achieving the best comparable prices in the area
2. Who is selling for less than what was originally quoted
3. How are the agents conducting themselves at open for inspections, and are they following up their leads - my wife and I were "mystery shoppers" at a number open for inspections
4. What's the average days on market for each agent.
I personally wouldn't place my property with someone based on price alone, you want someone with the appropriate expertise.
To make matters more interesting, we actually scaled up commissions if the agents hit certain targets. Coincidentally, the last two properties we sold achieved great results.
I have access to some great RP data reports that can help with some of the above mentioned metrics.
Feel free to give me a call on 1800 LOANCO if you'd like access to these reports
All the best,
Gerry Ardesi
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Q: Can I swap out of a fixed rate mortgage at Bank X and move to Bank Y at the same old fixed rate and therefore have the new bank effectively pay the old bank for the mark-to-market on the fix-rate break costs?
A: Hi Jason,
I just read your additional comments, is this a commercial/business transaction? Either way, it would be a good idea to complete a cost benefit analysis for breaking the fixed contract.
Per previous comments, you may be able to amortise the cost, but I'm not sure any bank will cover it.
We recently negotiated on a similar issue for one of our commercial clients. Application and setup costs were circa $30k, we were able to get this down to $4k which took away some of the initial "pain".
Happy to help.
Gerry Ardesi
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Q: We want to use our Super to purchase Land and we don't have enough in Super, can we use what we have for a deposit?
A: Hi Nathan,
You'd want to have a chat to your accountant about the suitability of purchasing land via an SMSF. I'm almost certain that a Land purchase is not suitable within SMSF.
There's a limited number of lenders who will finance SMSF loans, each with a different set of rules.
Happy to discuss your options with you.
All the best,
Gerry
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Q: What lenders cap LMI above 95% for Owner Occupier, other than BoQ to 99%, Bankwest to 98%?
A: Hi Jodi,
I'm not sure if they're on your panel, but Liberty and Qantas credit union have a full cap offering.
Cheers,
Gerry
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Q: We have had a few issues that have affected our credit rating but things have turned around and we now have around 20% deposit for a new home. Will our credit rating stop us from getting a new loan and what options do we have?
A: Hi Robyn,
Great to hear you’ve turned things around!
There are quite a few lenders who understand people experience some bumps in their journey. Depending on the extent of the bumps, pricing is also competitive due to the number of lenders competing in this space.
A 20% deposit is also great start. A sizeable deposit like yours certainly opens up the number of options available to you.
I’d be more than happy to have a chat, any excuse to make my way to the coffee capital is a good one.
Have a great day,
Gerry Ardesi
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Q: Is cross-collateralization good or bad? e.g If I go with cross-collateralization, one of the bank is offering me consolidation of 4 of my loans which are currently with 3 banks and at a better rate. Should I take that offer?
A: Hi Shireesh,
The Bank’s love sticky customers, by that I mean customers who have placed all of their facilities with one bank thus making it hard for customers to leave.
If your short–mid term strategy is to sit tight on your current portfolio, then perhaps the risk of placing all of your eggs in the one basket may be worth the reward. That’s something that you and your finance broker need to weigh up
If your strategy is to sell or acquire additional properties, you risk limiting your options to the credit policy and capacity testing of just the one lender.
Per the comments by my peers, you’d be well advised to get a second opinion. You should also call your current lenders and ask them to match the proposed rates.
Have a great weekend,
Gerry Ardesi – 1800 LOANCO
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Q: URGENT! It seems Section 32's (legal paperwork for sale of property) don't include a copy of Title anymore? The only similar document which is included is a Planning Subdivision ducument. Is this usual now? Can anyone enlighten us please.
A: Hi Lynette,
To my knowledge, a copy of the title needs to provided within the section 32. Per previous responses I would certainly recommend you seek the services of a Conveyancer or Solicitor
If you would like to order a copy of the title yourself, you can do by visiting https://www.landata.vic.gov.au. From memory this will cost you circa $20
All the best,
Gerry
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Q: Looking for a 85% LVR I/O investment loan with LMI waived? Are they available for NON PROFESSIONALS?
A: Hi Leanne,
To my knowledge, there is only one loan that fits your description i.e. Non Professional Investment loan, 85% NO LMI and Interest only. The variable rate depends on loan amount, but for interest only, rates start in the low-mid 5's and comes with annual fee of $350
You may want to weigh up whether paying LMI is actually beneficial in the long run. If you're loan is greater than $250,000 and LVR is sub 90% you may be able to find considerable savings on rate and fees, which should translate into a considerable reduction in out of pocket expense.
Have a great weekend,
Gerry Ardesi
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Q: Just about to sell house due to separation and owe money on a car, should I pay car off 28K and save the 400 a month or keep paying car and buy?
A: Hi Michael,
In times of change it's a good idea to take some time out for yourself and make plans your future. Once you know where you're heading you'll be able to answer your question. A simple fact find with a broker or lender will help you work out what's achievable in the short and long term and help you set some achievable goals.
If you're not ready to think about future plans, an interim solution may be to replace your car loan with a personal loan. The personal loan should provide you with an option to contribute additional funds without penalty - thus saving you interest - and provide the ability to redraw these funds if and when required
This can turn out to be an expensive exercise, if you are thinking about going down this route, you should keep the following in mind:
1. Does your current car loan provide you with a tax benefit i.e. is this a work vehicle
2. Fee's relating to the early termination of your current finance contract
3. Personal loan rate's, fee's and flexibility
4. Loan Term - Try to mirror the remaining term of your current loan
Once you have all of these details you can weigh up the cost and what's right for you.
All the best,
Gerry Ardesi
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Q: Is there a lender out there who will lend on lvr up to 70% with low short term income? I have high asset but 2 to 3 income flow will be low so can't get loan value to that ratio.
A: Hi John,
There are a couple of lenders who consider short term ABN or PAYG income, however, it's difficult to comment on LVR without knowing more about your situation.
If your asset position is positive, you may consider including them as security to bring your overall LVR down.
Have a great day,
Gerry
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Q: When borrowing off a financial institution, what are the advantages & disadvantages of borrowing your maximum and using an offset account type set up?
A: Hi Michael,
Having cash in an offset account for a rainy day or future investment help's some people sleep at night, it can also be disastrous if you're not disciplined
Per Erol's comment's, if you are borrowing more than 80% of your property value you will generally pay Lenders mortgage insurance (LMI). If you're ok with that, it's important to note that LMI premiums vary depending on your loan to value ratio (LVR)
Example 1 - If you're borrowing 85% of your property value, you may pay an LMI premium of circa 1.25% of the loan amount. That would equate to $5,355 on a $425,000 loan amount
Example 2 - If you're borrowing 90% of your property value, you may pay an LMI premium of circa 2.13% of the loan amount. That would equate to a premium of $9,585 on a $450,000 loan amount
Note: The numbers in the above examples are estimates only, LMI premiums can and do vary depending on a number of factors
If you are borrowing additional funds, you'll generally have to provide your lender with a stated purpose. The level of detail required will vary between lenders and LVR.
Bias aside, it's a great idea to talk to a Broker or finance specialist when planning for change. A good broker can help you weigh up your current and future goals and put a strategy in place to help you achieve them.
Have great day,
Gerry Ardesi
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Q: With the banks raising rates out of cycle (independently of the RBA), are we likely to see, or are we already seeing rates for commercial loans or say commercial property (office, industrial, retail etc) loan margins increase also ?
A: Hi Matt,
In the last two weeks NAB and ANZ raised their rate/margin on a number of their commercial offerings, but we’re yet to see whether the other “big two” will follow.
Outside of the big four, we’ve seen two lenders do the reverse and drop rates on some of their commercial offerings.
Competition in the commercial space will be an interesting one to watch, according to one lender commercial is the new black!
As with home loans, its good practice to review your loans every 12 – 24 months. This doesn’t always mean you need to move banks, but it certainly helps to ensure you’re getting fair value.
Best Regards,
Gerry Ardesi – 1800 LOANCO
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Q: We have recently had some bad luck and have ended up falling behind in our mortgage. I've tried talking to our bank, but they don't seem very interested in coming to the party on some type of plan. Will I be able to re finance and consolidate other debts?
A: Hi Michelle,
Really sorry to hear about your run of bad luck.
I’m not an expert in this field, but I know that ASIC provide a free financial counselling service. The following is a link to their financial counselling page
https://www.moneysmart.gov.au/managing-your-money/managing-debts/financial-counselling
I hope it all works out for you
Gerry Ardesi
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Q: Can you see interest rates rising in 2016?
A: Hi Graeme,
According to a survey of the big 4 and other leading financial institutions, they predict that RBA will keep rates on hold or decrease 0.25% by the end of 2016. Most are predicting the RBA rates to remain on hold.
In this current environment RBA movements aren’t always a signal of what will happen with rates. Last year we saw the big four and numerous other lenders lift rates without any RBA increases, citing rising funding costs and onerous regulatory changes. This year we have seen two of the big four increase rates on some of their commercial products for the same reason.
That was my very long winded way of saying that bank rates are extremely difficult to pick in this current environment, and have been for quite a while.
If you are thinking about reviewing your home loan, it’s a great time to be a new to bank customer.
A lot of lenders are charging their existing customers higher rates due to “rising cost of funds” whilst at the same time enticing new clients with varying offers including discounted rates, frequent flyer points and cash rebates for new customers.
If you’re after the security of predictable mortgage repayments it may also be a good time to look at fixing some of your home loan.
I hope that helps!
Gerry Ardesi – 1800 LOANCO
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Q: What is the best interest rate I could possibly expect to negotiate if I refinance my home loan?
A: Hi Laina,
If you tick all of the right boxes, comparison rates for owner occupied properties can start as low as 4.05% for loans ranging from $150,000 - $500,000 or 4.03% for loans over $500,000.
It's really important you take into consideration comparison rates vs advertised rate. Comparison rates take into account the interest rate as well as fees and charges relating to your loan. Advertised or headline rates generally don't take into account any other charges incurred.
Per previous answers, there are quite a number of variables to consider. A proper product comparison can be provided once a broker or financier has a better understanding of your current situation and your future goals/needs.
Have a great day!
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Q: Does it make sense to use the equity in your property to purchase a private vehicle versus a lease or personal loan with regards to the interest rate?
A: Hi Nicholas,
From a pure rate perspective you will generally find that your home loan rate will be better than car loan rates. That being said, car finance has become much more competitive over the years and in some instances you may find the difference marginal if purchasing a new or near new vehicle.
The below is a really high level list of pros and cons:
Car loan pros - fixed rate, fixed payment, set and forget monthly repayments
Car loan cons - inflexible, no additional payments allowed, maximum term of 7 years
Home loan pros - improved rate, flexible, extended payment terms
Home Loan cons - self managed, requires discipline, potential to cost you more in the long run
Have a great day!
Nicholas Bedggood
8 years ago
