No worries Ben.

Ask them specific questions about their cashout policy at certain loan to value ratios.

Also get them to check how your borrowing capacity stacks up when accessing equity and purchasing another property (assuming that's why you need to access equity).  The reason I say this is because most lenders who provide cashouts for…[Read more]

Ben Curtis wrote:
Does anyone have an opinion about fixed interest rates

They're great if you need to know what your repayments are going to be each month. So from a budgeting perspective it can be handy. They're not so great if you require some flexibility in your loan – like linking an offset, making additional repayments, redrawing, etc.…[Read more]

Couldn't agree more Shahin. They provide such a basic snapshot without taking into account the larger, longer term picture. 

Thankfully that's why we'll always have jobs

Cheers

Jamie

brmiau wrote:

Jamie, so does that mean if I purchased an IP for $350k my loan would be the purchase price minus my available equity? Therefor the loan would be $267k for the IP?

The equity that you access will be spread over the deposit and costs on the IP.

So let's assume that the costs associated with the purchase are 5% of the purchase…[Read more]

Hi mizfits

Look closely at your own affordability too. Just because a bank will lend $x amount it doesn't necessarily mean that you can personally afford it. 

Cheers

Jamie

Sydney is hot at the moment – especially out west.

Personally, I've only seen a few valuations come back low this month – two were refinances where the owner thought their properties were worth more than they were valued at, the other was an OTP property.

I haven't had any valuations come in lower than purchase price for normal established…[Read more]

Hi Mizfitz

I've got a lot of clients on low incomes who still manage to invest in property – quite a few are from this forum.

It comes down to using the right lenders and correct structuring – the yields on the properties you're purchasing will also come into play.

Best to get a decent broker to crunch the numbers for you.

Cheers

Jamie

Hi Graham

I think this might be the domain of Darryl Richards who's a regular on this forum is based up your way – https://www.propertyinvesting.com/user/rpi

He might be able to provide some advice.

Cheers

Jamie

Hi Brad

There's usable equity and actual equity.

Your actual equity is $167k – which is simply the value of your property minus the loan amount.

The useable equity is what the bank will let you access.

Most banks will allow you to take your loan up to 80% of the properties value.

In this instance, you'd be able to access $83k which would be…[Read more]

xfitzyx wrote:
Great that makes sense. I think at this stage that money in the IP won't be used to buy the PPOR. Going forward once I have both I just need to figure out whether to pay down the PPOR, or pay down the IP as a preference. From what I've read, paying down the PPOR makes sense as it's not the investment asset?

Yes – if you're…[Read more]

Hi Adam

You can only claim the original loan amount against the IP – not an increased amount from the refinance.

Ideally, it should be set something like this.

PPOR (now IP)
Loan 1: Original loan (now tax deductible and ideally interest only)
Loan 2: Equity release for new PPOR deposit/cost (not deductible)

New PPOR
Loan 1: Remaining balance…[Read more]

Refinancing costs should be deductible for an IP loan.

Cheers

Jamie

Agree with Catalyst – they're going to have to wear it.

Cheers

Jamie

Hi Nicky

No need to have an offset linked to each loan – you only need to be offsetting one loan. You'd only need two if you managed to offset an entire loan – and had surplus cash to place elsewhere.

If you're planning on owning a PPOR at some point than best to preserve your current IP debt and utlise the offset against an interest only loan…[Read more]

Hi Nicky

Are you planning on purchasing a PPOR at some point?

If so, I'd preserve the principle on each IP loan instead of paying it down.

Like Richard said, link an offset account against one and make all of your extra repayments into the offset instead.

Cheers

Jamie

I doubt it – otherwise PMs  in that state are going to be busy signing up tenants to the new format. Chances are it comes into effect when new leases are issued. In any case, best to suss out with the relevant authority in your state.

Cheers

Jamie

Hi Woody

If you have any doubts with the structure – best to get a pro like Richard on board.

Sounds like your current broker isn't crossing though so that's always a good thing.

Cheers

Jamie

Thanks Shahin and Richard – appreciate the comments.

Cheers

Jamie

Qlds007 wrote:
Wow makes the 90 minutes i spent with a forum client this morning for the price of a cup of coffee look like an absolute bargain.

lol – tell me about it! 90 minutes is worth at least two lattes though.

Cheers

Jamie

What's the actual product?

Don't just focus on rate – doing so can be costly in the long run. 

Cheers

Jamie