All Topics / Help Needed! / Urgent Reply – And Real advice

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  • Profile photo of JpcashflowJpcashflow
    Participant
    @jpcashflow
    Join Date: 2007
    Post Count: 575

    Hi i have ran into this gem of a property today. I can make an offer of 340k.

    I have 50k in savings and a property which is worth 260K and i only own 150K on it

    what would be the best way to obtain this second property if i do go ahead with this?

    This will be a invesment property i belive stamp duty should be around the 14k mark

    cheers

    Jpcashflow | JP Financial Group
    http://www.jpfinancialgroup.com.au
    Email Me | Phone Me

    Your first port of call in finance :)

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    I would probably pay $50,000 off your home loan and then get a LOC on this property up to 80%.
    -Use this LOC (Line of Credit) to pay for the 20% deposit and costs of the new purchase and then get another 80% loan for the remainder.
    -New loan should be IO.
    -Home loan should have a 100% offset account attached where all salary and rents etc go.
    -Use a credit card with points to pay bills and leave the money in the offset as long as possible.
    -Borrow from the LOC to pay all expenses related to the new investment property such as rates, insurance etc. Keep the cash you would have used for this in your offset account.

    Talk to your accountant on borrowing any short fall from the interest repayments – rental income.

    Borrowing to fund investment expenses frees up money for the offset which saves non-deductible interest.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    I agree with Terry.

    You might like to have both loans as interest only with the offset account attached to the non deductible loan.

    What starts out as a PPOR could end easily end up as a IP and therefore flexibility is the key.

    Also make sure the loans are non cross collateralised.

    Richard Taylor | Australia's leading private lender

    Profile photo of JpcashflowJpcashflow
    Participant
    @jpcashflow
    Join Date: 2007
    Post Count: 575
    Terryw wrote:
    I would probably pay $50,000 off your home loan and then get a LOC on this property up to 80%.
    -Use this LOC (Line of Credit) to pay for the 20% deposit and costs of the new purchase and then get another 80% loan for the remainder.
    -New loan should be IO.
    -Home loan should have a 100% offset account attached where all salary and rents etc go.
    -Use a credit card with points to pay bills and leave the money in the offset as long as possible.
    -Borrow from the LOC to pay all expenses related to the new investment property such as rates, insurance etc. Keep the cash you would have used for this in your offset account.

    Talk to your accountant on borrowing any short fall from the interest repayments – rental income.

    Borrowing to fund investment expenses frees up money for the offset which saves non-deductible interest.

    Thats some good advice thanks for that Terry,

    are you based in Melbourne?

    Jpcashflow | JP Financial Group
    http://www.jpfinancialgroup.com.au
    Email Me | Phone Me

    Your first port of call in finance :)

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Hi Johan

    Nope, i am in Sydney.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Johan

    This day and age it doesnt really matter where your Broker  located as most applications are lodged electronically.

    Terry is only an email a way and with his knowledge and experience will serve you better than any more local mortgage broker.

    Just drop him a line he doesnt bite.

    Richard Taylor | Australia's leading private lender

    Profile photo of JpcashflowJpcashflow
    Participant
    @jpcashflow
    Join Date: 2007
    Post Count: 575
    Terryw wrote:
    Hi Johan

    Nope, i am in Sydney.

    Hi Guys,

    Thanks for the advice in the next week or two i will contact you Terry, Can you PM your contact details if possible?

    cheers

    Jpcashflow | JP Financial Group
    http://www.jpfinancialgroup.com.au
    Email Me | Phone Me

    Your first port of call in finance :)

Viewing 7 posts - 1 through 7 (of 7 total)

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