We just got pre-approval for a home loan with ratebusters. Essentially as they are cheap in the long term - though there is a bit of a fee hit in the short term I think it is worth it. Also they were the most helpful (both talking with them and the general information available on their web site) and the “up to 10 splits after settlement” feature combined with the 100% offset best meets what I am trying to do with investment plans.
Now the hard bit of actually looking for a place.
Try Minihub. They will also do MediaWiki.
yes, this is a plug. yes I do have a prior relationship with these guys.
Found this one while looking up ways to replace the carpet if we end up with a house with carpet.. Bamboo Flooring.
Style Limited :
Bloomberg Share Summary
Style Limited Company Web Site
SYP is involved in the manufacture, distribution and marketing of a range of renewable resource products throughout Australia and New Zealand. The company is concentrating on a unique, patented flooring made from strand woven bamboo with a timber appearance.
Don’t know if it’sa good investment or not, but I like the bamboo approach.
Objective: To provide long-term growth through investment in overseas companies which meet the Australian Ethical Charter.
Check the link to the announcement on the Australian Ethical Website for further info.
Great news as though there is also the excellent Hunter Hall trusts, always good to have some extra options to diversify in this area.
Well after asking about it looks like how I was hoping it worked is not quite how it works (I guess that would just be too easy for me).. but there are a few close approximations.. ratebusters has relatively low interest rates, a line of credit facility, and up to 10 account splits at $100 per split if done after settlement.. with this I may be able to slice up the loan into investment specific portions as build equity with not too much additional expense or hassle.
Also ratebusters relatively prompt and straightforward in answering my questions, and their web site is one of the few that actually bothers to go into a bit of detail on all the ifs and buts and elses of their products, with actual descriptions and examples of How It Works.
The disadvantage is their fee structure appears set to penalise people who leave them early, but then all things considered I see no reason to leave them early if all goes according to plan.
Bloomberg info for Clime Asset Management.. just found this interesting ETF after reading this article on the InvestEd site… pity it isn’t on the St George margin lending acceptable securities list though.
Well I’ll continue to shoot off emails to the loan providers and see if any of them reply.
excerpt from aus.invest thread:
On Sun, 27 May 2007 13:07:35 +0930, Fredd wrote:
>>I am considering a “line of credit” type home loan to buy a house so I
>> can continue with my regular investing in shares, using the equity
>> developed in the home loan further down the track.
>>
>> Accountant thinks this is fine (tax wise) as long as I get seperate
>> accounts on the loan to draw a line between the tax deductable and non
>> tax deductable parts of the interest paid.
>
> An ideal method of funding investment in that residential real estate
> secured loans are invariably the cheapest form of finance. Two caveats
> however:
> 1. Any borrowing can greatly magnify your losses so you need the
> knowlege, confidence, and financial ability to be able to hang on even
> if your investment tanks in the short term or the income from it dries
> up.
>
>
I already have a margin loan and I am comfortable with the increased risk
aspect.
> 2. Your accountants advice that you get ” get seperate accounts on the
> loan to draw a line between the tax deductable and non tax deductable
> parts of the interest paid” is absolutely essential. If you contaminate
> the loans you will lose the tax deduction. By contaminate I mean mix
> business and private sections, because then you will be unable to
> unambiguously satisfy the tax dept as to which dollar of loan interest
> or loan repayment related to private or business. Tax law requires that
> you be able to unambiguously attribute interest expenditure to a
> specific asset, not just on an apportioned balance of probabilities.
This bit, and the actual mechanics of how these loans work are what I am
curious about: I was thinking that how it works is that these line of
credit loans with seperate accounts mean I can draw money out (to use for
investments, or whatever) against the equity in the home, as I build up
the equity in the home. Then receive seperate interest (and transaction)
statements for the two seperate uses.
I just spoke to someone at Wizard Home Loans - a bit of confusion while I
tried to explain myself - still getting to grips with the terminology,
plus there is a bit of ambiguity with splitting/seperate accounts also
meaning using mixes of different loan products. They stated it doesn’t
work like that and I would be best off with a more conventional home loan
and a fixed 20K line of credit, and any “split account” is at an amount
fixed at the start of the loan and difficult to change afterwards.
Is there any loan that does match what I explained above? Or have I over
estimated the flexibility of current loan products on offer?
Well we have decided to get a house, or unit. As I still want to continue my messing with investments, a Line of Credit type home loan looks the go. I like the product from Wizard Wealth Power (Line of Credit) loan but the interest rate seems a tad high compared to what’s out there. We’ll see if they negotiate down.. otherwise it’s off to LoanAustralia..
Also that meet the parameters of having seperate acounts for keeping personal and investment use of the loan differentiated is the LoanAustralia Line of Credit. The difference in Comparison Rates is 7.77% - 7.16% = 0.61% between LoanAustralia and Wizard.
Also interesting to compare these two web pages:
http://www.loanaustralia.com.au/interest_rates.asp
http://www.aaamortgagefinance.com/interest_rates.asp
Hosted on the same class C network, owned by the same parent company, just differently themed and with a difference in the interest rates. Guess one is a site for signing people up at a higher interest rate if people don’t look around too hard.
Well Etrade has been taken over by ANZ, so my Etrade shares just replaced by equivalent value of ANZ shares. A pity as I liked Etrade.. not as much of a fan of ANZ (I had a few ANZ accounts and the fees way too high, give me Bendigo Bank any day!).. but then as a shareholder there are surely worse shares to hold.