Aaahhhhh grasshopper you have so much to learn.
The analogy placed before you was to evidence what the power of thought can do for you. Everyone thought that the bumblebee could not fly due to aerodynamics and wing size. Thus was the belief for a very long time. No one understood oscillating vortexs nor the power of lift they create. So looking at a bumblebee everyone said it could not fly yet it continued to do so. It wasn't until they understood the dynamics of the lift created before they could prove that it could.
The property market is the same. Everyone else is saying it is going to crash. Yet it continues to fly on like the bumblebee.
Are you picking up what I am putting down now there AlexG1 ???
this is what the thread has become
and how long do you think the raising of new debt and increases in money supply not tied to GDP will happen?
new loans arent exactly taking off, and as my good mate who works as the loan guy at a big four in the city, they are willing to give anyone a loan atm, he said i could get 98% for a 500-600k property.
i respectfully declined
LOLOL ...... he said she said. I say you can get a 110% loan for 1 million. Put it in writing and see how it works out for you. I have just come back from NAB after a review of my portfolio. Over 40% equity across the board. They are asking me for 2 years financials (Family Trust and the development company as well as the private company) , statement of position with the ATO, copies of insurances on all my properties, copies of leases, last 3 years personal tax returns AND bank statements.
Yep they sure are willing to give anyone a loan atm.
PM me with the details of your good mate from the city big four and I will call him for my next loan at 98% please.
Compare apples to oranges. Requirements for a trust structure differ from that of an individual.
I am in the same boat whenever we invest via the trust [fin stats, leases, insurance etc].
It is always harder for loans under this structure despite the fact the trust may hold several properties and have strong income flows. Banks prefer people rather than legal entities - as you well know.
and how long do you think the raising of new debt and increases in money supply not tied to GDP will happen?
new loans arent exactly taking off, and as my good mate who works as the loan guy at a big four in the city, they are willing to give anyone a loan atm, he said i could get 98% for a 500-600k property.
i respectfully declined
so by arguing that loans are difficult to come by where is potential growth going to come from?
Who can borrow 95%?
Australian lenders consider all loans over 80% of the purchase price to be a high risk. Because of this they insure these loans with Lenders Mortgage Insurers (LMI). The LMI providers have their own lending guidelines that are stricter than those used by the banks, and so because of this borrowing 95% relatively difficult compared to other home loans.
What types of borrowers are the banks looking for?
Clear credit history: This means that your credit file has no blemishes whatsoever and that you have paid all of your bills such as rent, credit cards, personal loans and other debts on time every time for the last 6 months.
Stable employment: In most cases you must have been in your current job for 6 to 12 months. Sometimes an exception can be made to this policy.
A good income: Lenders are more conservative when assessing your ability to repay a 95% loan. For this reason your “serviceability ratio” must be outstanding.
Reasonable asset position: Lenders want to see that you have a good asset position relative to your age & income.
Genuine savings: This is the one that catches most people out. Almost all lenders require you to prove that you have saved 5% of the purchase price. If you don’t have genuine savings then consider a 95% no savings loan (very difficult to qualify for) or a 110% guarantor home loan.
Minimal debts: People with many credit cards & personal loans are generally not accepted. As a rough guide people who have more than 7% of the purchase price in unsecured debts such as personal loans and credit cards are often not approved.
Location / property type: Many lenders may be hesitant to approve loans for properties in smaller towns, high rise units in the CBD or other unusual properties.
Not all lenders offer 95% loans
Lenders only have so much funds to lend out, they want to maximise their profit while keep risks under control. And because a 95% home loan is very high risk, most of their available funds are allocated to less risky loans.
In short, lenders don’t have much money to lend at 95%, hence they only accept low risk borrowers!
http://www.homeloanexperts.com.au/no-deposit-home-loans/95-percent-home-loan/
WOWEEEEEEEEEEEEEE ........ who would have thunk it?
You would have to be on over 100k a year to borrow 500k by the way with ZERO peripheral debt, same vocation for 5 years, 6 months savings history ......... need I go on?:
i fit all criteria minus the 5 years and make up for it in savings history.. yes I am eligible, no Ill pass thanks, as you say if there no cap growth what advantage in owning a PPOR when renting enables me to save more?
True ....... which is why you sign a guarantee as an individual to cover the debts of the Trust, company, whatever. Sometimes a fixed and floating charge over the company as well. Structure is the same. It is still a registered mortgage over a green title. Under the UCCC it makes no difference to the bank. Just more paperwork
In a legal liability context, it is different for the banks. In most cases one guarantor + several beneficiaries is not comparable to all the aforementioned parties taking out mortgages in their own names [&/or joint]. The latter get loans approved much easier, and it is still happening. Not going to play the he says she says game, but have friends in banking arms who reiterate what white_goodman is saying.
Loans don't comes as easily for us folk, why do you think their legal team spends their time peering through the trust deeds every time a loan application is made.
rent is $100 a week, saving is a tad over $1k a week...
I can afford, but I dont see it as a good investment.
And as for the lenders not getting a bit hows ya father with standards...
http://macrobusiness.com.au/2011/03/banks-continue-to-lower-lending-standards/
Ask a large proportion of talented next generation of Australian's where they are going to live, if housing continues on this inflated path, in let's say ten years from now. You will end up having a considerably large exodus of Australians living and working in more affordable places around the globe, just like Britain experienced. Ones that probably will stay here if the cost of living isn't going to be so high.
How many Australian's are aware of what's going on in cities like Adelaide, for example, in which abnormal volumes of businesses have gone under. You're still seeing speculators trying to sell you the story that the property market here is stable. The statistics and information on housing here is too vague.
The sub prime mess was pretty obvious even four years ago. If the stats and information wasn't available back then, then the US consumer would have gotten itself further in debt. The banks would have kept on lending. We don't have any real official warning signs here. So consumers will get themselves further in debt, just like they would have in the US if the statistics didn't come-out when it did.
Posted by a dude named Leith from unconventionaleconomist@hotmail. LMFAORF
Ummmmmm ...... you do realise that NONE of these practices went forward don't you? ING never implemented their "never ending loan". ANZ lifted their LVR to existing customers "only" for refinancing purposes for retention. Oh yeah ...... you still have the "other" criteria involved. Like LMI and valuations and proven savings history and DSR's. But you know all of this don't you white_goodman.
But but but don't let a good story get in the way of truth now white_goodman. $100 a week you say in rent eh? Can I move in with you? Does this include outgoings? Did you pay a bond? How much of the home can you utilise? Is it a share arrangement?
Saving $1000 per week eh? $52,000 per annum. WOW ....... Do you have a life? Or are you on like $200,000 per year gross? Do you have a car? What about expenses? Do you travel overseas? Have you been overseas? Just interested is all as to how all this is possible. I think it is fantastic you can save this much money. And do what with it at the end of the day? I suppose you can do anything you like.
LOLOL ...... he said she said. I say you can get a 110% loan for 1 million. Put it in writing and see how it works out for you. I have just come back from NAB after a review of my portfolio. Over 40% equity across the board. They are asking me for 2 years financials (Family Trust and the development company as well as the private company) , statement of position with the ATO, copies of insurances on all my properties, copies of leases, last 3 years personal tax returns AND bank statements.
Yep they sure are willing to give anyone a loan atm.
'
PM me with the details of your good mate from the city big four and I will call him for my next loan at 98% please.
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