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  • Profile photo of Robert11Robert11
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    @robert11
    Join Date: 2010
    Post Count: 7

    hi everyone i am new and in need of some real help, just wondering if anybody can help me with my financial situation it is a complete mess. I will tell you a bit about it i have 2 properties under one mortgage one ppor and one investment which i owe about 400000 and have value of 780000 i also have 2 investment properties both valued at 380000 owing 314000 on one and 295000 on the other both of these loans are pi loans which was what was told to me by my mortgage broker to be the best way for these loans to be structured but as i am finding out as i go along it doesnt' seem to be the best way. i have also purchased a block of land which titles in march which i plain to build on and once that is finished it will have a value of around 400000and i will owe 305000. As you can see there is just no order to anything i am 31 self employed and have been for 7 years i earn 80k plus 60k dividend =140k a year so i am in a good position to set my life up but the way everything is structured i have been told by my broker that i have just about reached the end of my lending capacity but i would like to buy more property. I live in Melbourne's sth eastern suburbs and all the properties are in Melbourne's sth eastern suburbs could somebody    PLEASE HELP ME 
    Regards
    Robert

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Hi Robert

    Sounds like a bit of a shambles – obviously not helped by your mortgage brokers advice.

    You need to get a good broker on your side, one that understands how to structure your finances correcly.

    I'm not spruiking myself but it's clear that you need to get rid of the one you currently use. Pete Tersteeg from Sage Lending has his office in SE Melb http://www.sagelending.com.au. He's a very good broker and will help you sort this mess out.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of BankerBanker
    Participant
    @banker
    Join Date: 2010
    Post Count: 371

    You need to speak to a good banker or broker.

    The 400,000 needs to be split to reflect personal and investment portions (unless all currently investment use ). The 314,000 and 245,000 are OK but should be interest only if you have other non-deductable debt.

    You want to offset income against personal debt. Depending on your business, trading through a family trust may allow you to move money from the business to personal accounts easier. This lets you offset cash you might have generated in the business (can’t do this easily without trading through a trust).
     
    It is often cheaper to restructure with your existing lender (assuming it's a good deal). If you currently have 4 properties it will costs around $1600 in titles fees (200 per release of mortgage and 200 to register new mortgages), up to $1400 to discharge fees from outgoing bank ($350 per title or  loan is common), plus deferred establishment fees if applicable. These are all before the new lenders fees.

    Which bank are you with?

    Be careful with both bankers and brokers as they will want you to change lenders. You might not need to.

    Banker

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

    Sounds like your broker has cost you a fortune in extra tax. I would seek a new broker who knows what they are doing and try to fix it asap before you go any further.

    2 Properties under one loan is an absolute disaster – especially as one is an investment. Every repayment you make will be reducing your investment loan as well as your personal home loan. This means more tax. which means wasting money!

    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 Robert11Robert11
    Participant
    @robert11
    Join Date: 2010
    Post Count: 7

    thanks heaps guys the 2 investment loans are with rams and the other is with nmmc. i thought this was the case i will change mortgage brokers straight away i will talk to sage lending is it best to talk to a broker or a financial planner and does anybody else have any suggestions for who i should contact

    Robert

    Profile photo of Robert11Robert11
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    @robert11
    Join Date: 2010
    Post Count: 7

    also with io loans one thing i am troubling to comprehend everybody says that you will be about 300000 better of over 25 years but do they factor in the extra 250000 you will pay in interest

    Robert

    Profile photo of Robert11Robert11
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    @robert11
    Join Date: 2010
    Post Count: 7

    also with io loans one thing i am troubling to comprehend everybody says that you will be about 300000 better of over 25 years but do they factor in the extra 250000 you will pay in interest

    Robert

    sorry that was meant to be 250000 in

    Profile photo of Robert11Robert11
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    @robert11
    Join Date: 2010
    Post Count: 7
    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Sounds like you don't fully comprehend IO loans -thats ok it took me about 5 years to get my head around them.

    The first thing you need to understand is the tax savings. The fact that you are paying PI means that you are paying down the loan. This is generally good but on an investment loan it means your tax deductions are decreasing. This extra you are paying could be put to better use by paying down your non deductible loan first. This would reduce the interest which isn't deductible and also leave the investment loan high so that your tax deductions would remain high. Overall you would be paying the same amount.

    Once you pay off your personal home loan then you can look at using PI loans on investments – but still I would suggest you use IO loans and use the extra money that you would have been paying to buy more properties.

    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 Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    Robert11 wrote:
    thanks heaps guys the 2 investment loans are with rams and the other is with nmmc. i thought this was the case i will change mortgage brokers straight away i will talk to sage lending is it best to talk to a broker or a financial planner and does anybody else have any suggestions for who i should contact

    Robert

    To sort this out, you just need to deal with a broker. However, I know Pete from Sage Lending also has a financial planning license.

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Robert11Robert11
    Participant
    @robert11
    Join Date: 2010
    Post Count: 7

    thanks for your response terry yeah it is hard to get my head around everything but hopefully with the right guidance i will get there. There is so much useful information on this website it is just a shame that i didn't find it 10 years ago i think if i had of i would have been in a much better position now

    Robert

Viewing 11 posts - 1 through 11 (of 11 total)

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