Friday, 22 February 2013

Financial Destiny Loan Advice

I meet a great Finance Broker at one of Ultimate Achiever Events
Todd from Financial Destiny 1300 63 3000
Todd had many great ways to look at different situations with getting different loans.  
He thinks outside the box and still has the passion in his job, like other individual brokers I have meet in the past. Basically this guy is a good one to have on your list. 

Todd below shared some of his knowledge below and gives some great advice on ways to improve you success with Investment loans. 
You can often see Todd at Ultimate Achievers events so keep a look out for him, see if he is at their next event.

Here are a couple of niche’s that you may find useful.

Simple way to increase borrowing capacity without extra income?

All lenders add an additional 1.5% - 2% loading to the variable rate when calculating your maximum loan capacity, and this naturally reduces your borrowing capacity. However we have lenders that will use the actual rate for loan servicing, with no loading, if you choose a 3, 4 or 5 year fixed rate. This can make a significant difference and allow you to borrow more.

Credit Scoring – ways to increase your chances of approval

Nearly all banks these days use an automated credit point scoring system, so when the application is lodged the computer immediately allocates points based on a wide range of factors contained within the loan application. This often leads to a declinal before a human being has even assessed the file and once declined at stage 1 it will not be reviewed by the bank!

Here are some interesting facts about point scoring

Ø  Always give a home phone number, even if it is your work number as this scores higher
Ø  Always include cash in the bank as this also scores highly
Ø  3 years plus in current employment and residence scores highly
Ø  Superannuation balances/ Home Contents/ Vehicles all score points
Ø  Lower the LVR the higher the points scored
Ø  Property owners score higher than renters
Ø  Multiple credit inquiries can kill a deal
Ø  Credit defaults, judgements etc will hurt your score

Genuine Savings and Non Genuine Savings

As a rule, for loans over 85% LVR the lenders require you to verify genuine savings for the deposit. The deposit must be genuine savings that has been saved over a period of 3 - 6 months and be evidenced by bank statements. However if you already have equity in an existing property (owner occupied or investment) then this qualifies as genuine savings.

We can also use historical rental payments to qualify under the genuine savings rule, as long as the borrower can demonstrate a minimum 12 months satisfactory continuous rental history and the property is leased through a licensed property manager or agent. In this instance the First Home Owners Grant and other concessions can allow a borrower to purchase a property without any savings.

Don’t shop around on your own!!!

With banks using credit point scoring to approve loans, it is vital that you do not make inquiries yourself at banks, credit unions etc as each inquiry you make adds a “hit” to your personal credit file. As soon as a bank sees these inquiries on your file they will decline your loan. That is why using an experienced mortgage broker is a crucial element of your strategy, we can research multiple lenders without incurring “hits” on your file, and recommend the appropriate product for your needs, thus greatly increasing your chances of approval first time

SMSF with Offset Account up to 72% LVR

We have an SMSF loan that allows a maximum LVR of 72% for residential security, with individual trustee, and the SMSF loan also has an offset account. This allows the fund to deposit surplus cash into the SMSF offset account to reduce the interest charges on the SMSF term loan

Business debts at home loan rates!

We can use equity in residential property to refinance any business debts onto a low residential rate. This results in a significant saving in interest, lower repayments and improved cashflow. Maximum LVR is 80%

Self employed borrowers – only 1 year financials required

Nearly all banks and lenders require self employed borrowers to produce the last 2 years business financials, personal tax returns etc to assess a loan application. The banks then take an average over the 2 years, so if you have one good income year and one not so good, it will reduce your borrowing capacity. However we have a lender that only requires you to show the latest tax return and financials, so if your profit and taxable income are strong in that one year then it will greatly improve your borrowing capacity.

Owner Builders

Although most lenders pulled back significantly in this market we can still access loans owner builder loans up to 75% LVR with a registered builder, or 60% if the borrower is also the builder

Off the plan purchases extended settlement

We can arrange for approval on loans with extended settlements up to 17 months for off the plan purchases

Display Homes

Loans are available up to 75% LVR for display homes

Company Title

These are traditionally very hard loans to place, we can assist up to 85% LVR if a company title is involved

FHOG released at land settlement

One of our lenders will allow the First Home Owner Grant to be advanced at land settlement (from the construction funds approved) and then later once the FHOG is paid by the Office of State Revenue it is paid back to the construction loan