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Put extra $ into PPOR or IP?1 2booge [43 Posts] Just about to refinance my IP to reduce my fortnightly payments and was wondering.....Should i be sinking as much money as possible into my PPOR and paying minimum repayments on the IP? Or, split the extra payments to put into both? After refinancing the IP will be only slightly negatively geared. Jamie M [2128 Posts]  Never reduce an IP loan if you have a PPOR loan. Cheers Jamie Pass Go Home Loans Pty Ltd - Australia wide Mortgage Broker  Qlds007 [9178 Posts]  Booge Wow there old friend. Hope you havent gone to far with the IP refinance because if you have sounds like the structure is all wrong. Do as Jamie mentioned and stick the surplus cash into your PPOR offset account or directly in the loan. Why are you refinacing ? Admitedly there are some crash hot rates around at the moment just make sure you dont cross collateralise your loans. Cheers Yours in Finance Richard Taylor - richard@tayloredfinancialsolutions.com.au Tel: 07 3720 1888 booge [43 Posts] The IP is purely in my name from before i met my wife. Haven't refinanced yet, meeting with Mortgage broker next week to discuss. The original loan was for $202K(30 year loan), now i owe $169K and was thinking of refinancing (25 year loan) so my fortnightly repayments are less. Any advice would be appreciated prior to meeting the broker! Jamie M [2128 Posts] Your broker should be able to advise on the best structure. If you have any doubts about the way they're approaching things - then contact any of the decent brokers on this forum and they'll be able to sort it out for you. Cheers Jamie Pass Go Home Loans Pty Ltd - Australia wide Mortgage Broker Qlds007 [9178 Posts] Hi booge May i ask why you are making fortnight repayments on an IP loan especially when they are principal & interest repayments. You really should be making interest only repayments. See what your Broker has to say and then post it on the forum and we can comment. If you are not happy with the advice as i mentioned earlier shoot Jamie a line and get someone who knows what they are doing on the job. Cheers Yours in Finance Richard Taylor - richard@tayloredfinancialsolutions.com.au Tel: 07 3720 1888 Shape [908 Posts]  booge wrote:
Forgive my ignorance, but how come? PPOR- Is a non -tax deducible debt..while the IP is. Regards Michael Chan ----- Finance (Mortgage/Commercial) Broker---- Paullie [210 Posts]  booge If I were you, Id refinance the PPOR as interest only with offset and the IP as IO. Put any extra money into the offset for your PPOR. This way you are taking full advantage of the deductibility of the IP loan. The reason to have the PPOR as interest only with offset is in the future if you move house and that becomes an IP, you can shift the funds from the offset to the new offset of your nre PPOR, thereby once again taking full advantage of the deductibility on the IP. Performance Training Centre Perth booge [43 Posts] I'd always assumed that paying down all debt was better. I was checking out the Chan-Naylor website, I think i may have to see them for the right advice. Anyone here used their services? Jamie M [2128 Posts] Paullie wrote:
booge Spot on. Cheers Jamie Pass Go Home Loans Pty Ltd - Australia wide Mortgage Broker Qlds007 [9178 Posts] And i certainly wouldnt be seeing C & N for the advice unless you go with a deep chequebook. Call either Michael or Jamie and the credit advice is free. Cheers Yours in Finance Richard Taylor - richard@tayloredfinancialsolutions.com.au Tel: 07 3720 1888 booge [43 Posts] Cheers, thanks Richard for the tip. In your opinion is refinancing on the remaining loan amount $169K as a 25 year interest only a better idea to free up cash flow? That was what my intention was. As opposed to just making my current mortgage of $204K an interest only loan? Qlds007 [9178 Posts] You wont be able to refinance to a 25 year interest only loan (with the odd exception) but depending on the lvr could make it a 10 year interest only term. No advantadge in refinancing to $204K interest only as you wont be able to claim the interest on the difference. I guess you need to ask "what do you want to achieve out of the process" and then work backwards from there. Hope this helps. Cheers Yours in Finance Richard Taylor - richard@tayloredfinancialsolutions.com.au Tel: 07 3720 1888 Terryw [12327 Posts]  booge wrote:
The IP is purely in my name from before i met my wife. Haven't refinanced yet, meeting with Mortgage broker next I am concerned by this comment. What do you mean - are you talking about adding the wife to title? Mortgage brokers cannot give tax or legal advice and I would be concerned about deductibility of loans if you do transfer and get this wrong. eg If you transfer for no consideration will her half of the loan be deductible? Regards Terryw booge [43 Posts] I'd still keep the title in my name only. Just trying to get the property positively geared by smaller mortgage payments. Terryw [12327 Posts] Best to pay off non deductible debt first as this will save you tax. Regards Terryw booge [43 Posts] Thats what i was thinking by reducing the IP mortgage payments and paying the mortgage on our PPOR with the money saved. Qlds007 [9178 Posts] Reduce the repayment by switching to interest only. Cheers Yours in Finance Richard Taylor - richard@tayloredfinancialsolutions.com.au Tel: 07 3720 1888 Terryw [12327 Posts] Thats the way. Make sure it is interest only too.. If you have an offset on the PPOR even better as your rents and wages can sit in this and help save you even more. Regards Terryw Henry Adams [98 Posts]  Qlds007 wrote:
Reduce the repayment by switching to interest only. Hi Qlds007, by using IO loan for the PPOR, does that means we need to refinance it every 3 years or so when the IO promotion period ends ? 1 2 |
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