Discussion in 'Finance & Banking' started by Mark Laszczuk, 6th Mar, 2006.
Article about borrowing
Good news. But .... where is the catch ??
One catch is that it is a fully securitised loan. This means LMI exposure. Not a big issue to a home owner but not the best product for an investor looking at building a portfolio of property.
There are cheaper fully securitised loans than this.
For the uneducated, can you please give a brief explanation of what a fully securtised loan means and why that isn't good for an investor? Thanks.
My understanding is that it means that all loans are mortgage insured. Rather than loans 80% + with mainstream lenders.
So whilst they may not pass on a LMI premium under 80% it is still exposed to the insurers. At some point you will be too exposed and they will start saying no to you.
If you intend borrowing often then I wouldn't recommend this type of loan unless you have no choice.
Is not an issue until it is an issue!
Can anyone more experienced in this area add anything here?
If that's a low rate, check this: http://www.theaustralian.news.com.au/common/story_page/0,5744,18373598%5E25658,00.html
Of course, it's only on 20% (ie a deposit). I wonder if this will create a little surge making housing is even less affordable?
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