Hi Shane

What is the approx purchase price?

Cheers

Yours in Finance

Hi Josh

Firstly welcome to the forum and i hope you enjoy your time with us.

It is not unusual to get conflicting advice between your Broker and friends and even between Brokers.

Unfortunately it looks like your current loan is a P & I based loan so you are limited to what you claim in the way of interest deductions for the existing loan whilst renting the property out. This was probably not structured correctly in the first place.

They way i would look to go forward is to access 20% of the new purchase price plus acqusition costs using the security of you current PPOR / future IP using an equity loan and then take a 80% standandalone loan secured against the new PPOR.

Keep the loans separate and not cross collateralised and look to link a 100% offset account to the new loan.

Rather than make the same mistake again look to take the new loan on an interest only basis if you think you may 1 day rent out the new PPOR and move again.

Be interested to hear what comments both your friends and current broker has suggested.

Cheers

Yours in Finance.

Hi Samson

Wow hold on there such a loan is not so simple and there are many considerations before you rush in.

Just to correct a couple of points:

1) Interest on a redraw is only deductible where the funds are to be used for investment however you would set up a separate split account rather than merely redraw funds on your PPOR.
2) LMI is deductible over 5 years or the term of the loan whichever is lesser however only deductible whilst the property is used for investment.

There are a few products out there where you maybe able to get a 90% with a fee instead of LMI which maybe cheaper and also a couple of other options to structure the loan over a shorter period of time to maximise your Tax deductions.

Also you need to consider what you will be doing with your existing PPOR once you move into the new one.

Personally i would get your mortgage broker to look at all of the options for you first before you rush in as it could be a very expensive mistake in the long run if you dont.

Cheers

Yours in Finance

Funnily it was my dog that came up with it.

He is not with us anymore so wont try and claim the royalities.

Cheers

Yours in Finance

Hi Angus

I have known Kim for 20 of those 30 years here in Brisbane and hate to say many of my clients still have nightmares over the old Nationale / Tonto products so regret to say no faith there.

Always good to see a member join up the same day a comment gets made on their organisation so they can immediately write a 300 word response promoting their services.

I assume you will be hanging around to freely assist other forum members without continually promoting your services.

Cheers

Yours in Finance 

Hi Wealth

Shoot me an email and i will send you back an article i wrote some years ago for one of the property magazines on my  10 reasons why you would not cross collateralise securities.

As Swampy has mentioned only benefit is for your lender.

Seem to spend most of my life at the moment restructuring loans for clients where their own Bank Xrossed the loans only to refuse further borrowing when the client most needed it.

Cheers

Yours in Finance.

Hope you have deep pockets as financing it at any decent lvr will be difficult.

Cheers

Yours in Finance

Totally agree that Jamie is a great guy and long standing contributor to the forum however if your son is only 16 he cannot legally enter into a Contract to buy a property for a couple of years.

Of course you could always look to establish a Family Trust with him as a named beneficiary and buy the property in Trust based on the fact that the property would always be for him.

We purchased a block of 6 x 2 units here in Brisbane a few years ago and renovated them all, selling off 3 and keeping 1 each for the children. They have all chosed their own unit and where they can they pay down some of the debt each week from pocket money or part time job etc.

Course if you Transfer the property into his sole name there are some CGT / Stamp Duty  implications however anything can be done.

Cheers

Yours in Finance

Charlie you are getting confused

Try $45,000 x 7.1% = $3195 / 365 x 182.5 = $1597.50

Cheers

Yours in Finance

Had another client ask me about it only the othre day.

Firstly it is an offset / redraw account so not a proper offset account and would not be good if you want to rent it out.

Secondly every loan is mortgage insured irrespective of the size of the loan or the lvr.
Might be ok now but why involve LMI when you dont have to.

Ask youself who actually lends the money and then remember what happen a year or two with such lender.

Think to yourself how do they do it and is it a special offer for a week or two before they put the rate up.

Personally they are dime a dozen lenders like this and they come and go like the seasons.

For an investor who intends to be around for the long term i would give them a wide berth.

Cheers

Yours in Finance