All Topics / Help Needed! / First Investment Property ontop of PPOR

Viewing 5 posts - 1 through 5 (of 5 total)
  • Profile photo of craigrachowcraigrachow
    Participant
    @craigrachow
    Join Date: 2013
    Post Count: 6

    looking to buy my first investment property and need some direction on finance.

    i currently own a unit with 140k in equity.

    i plan to purchase a investment properly with 420k (have adding in stamp duty, conveyance etc) this property will be a joint loan between me and someone else.

    mortgage broker recommended i use 80k equity of my ppor and get a joint loan of 360k for the IP. all packaged with my current lender.

    both me and my partner have 15k each in the bank but there not advising to use this, im disagreeing as i would like to loan less so that my net gearing is neural not negative.

    i went to a second broker who said exactly the same thing.

    has anyone been in a similar situation and/or what other options do i have?

    im flexible with property prices, mortgage options but am looking to get a neural to positively geared investment.

    Profile photo of TheFinanceShopTheFinanceShop
    Participant
    @thefinanceshop
    Join Date: 2012
    Post Count: 1,271

    What they have said is correct as long as the loans and properties are separate. I believe that they are saying borrow the whole amount i.e. 105% of the purchase which you should do so you maximum you tax deductibility. The only thing I don't understand is why you are using $80k instead of around $110k. That way you don't pay LMI (which is what you want) and you maximise your tax.

    I don't understand the part where they are telling you that you should use $80k and have a loan of $360k. 

    Also I would consider getting free upfront vals done on the PPOR to determine the maximum equity available.

    Regards

    Shahin

    TheFinanceShop | Elite Property Finance
    http://www.elitepropertyfinance.com
    Email Me | Phone Me

    Residential and Commercial Brokerage

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

    It makes sense to use the equity in your current property to cover the deposit/costs.

    Are you happy to chip in the whole lot for the deposit/costs or would you prefer it to be a more equitable contribution between you and the person your investing with? Sorry if that sounds silly – just difficult to know from the original post if your investing with a spouse or a business partner. 

    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 PLCPLC
    Participant
    @plc
    Join Date: 2012
    Post Count: 400

    Do you have any outstanding loan against you current PPOR? If so, then the $15K should be used against that in some fashion. Always ideal to pay off you non-deductible debt first.

    Cheers

    Tom

    PLC | Phoenix Loan Consulting
    Email Me | Phone Me

    Melbourne based Mortgage Broker | Making Finance Simple

    Profile photo of craigrachowcraigrachow
    Participant
    @craigrachow
    Join Date: 2013
    Post Count: 6

    thank you all for your kind comments.

    after a few sleeps and reading i understand that it makes sense to have all necessary loan amounts on my IP and put any spare funds towards my PPOR

    i will question the broker to investigate the LMI fee as if i dont have to pay it great!

    PS the partner going in with me is long time GF (7yrs) . she cannot contribute any other way apart from her 13k which it looks like we wont need if we borrow using my equity. im happy with this agreement.

Viewing 5 posts - 1 through 5 (of 5 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.