Is going to depend in what name the Title is in.

If it is in your personal name then the LOC will need to be in your personal name also (Can only think of one lender who does things slightly differently) 

Taking the loan out in a Company name with you as the Director and Guarantor will not increase your borrowing ability.
That myth was put to bed many years ago.

Cheers

Yours in Finance

Ok depending on what State you are in you have a couple of options:

1) Selling the property to a Unit Trust structure with you holding 100% of the units. Borrow 100% of the market valuation and use the funds to pay down the existing debt of $70K. Balance of funds circa $230K can be used as deposit on the new PPOR.

100% of the interest on the $300K loan now becomes deductible interest however the downside is that you may incur Stamp Duty on the Transfer. Holding the property in Trust may incur Land Tax depending on the State location.

2) Claim the interest on $70K only. Switch the loan to interest only and take out a sub loan on the security of the PPOR to fund a 20% deposit and acqusition costs.

Take out a separate loan with alternative lender secured against the new PPOR.

Of course if you go route 1 you need to compare initial costs with ongoing savings and look at the time you believe you will hold the IP current PPOR. No point in costing you $20K stamp duty and getting your money back over say 2 years if you then decide to sell the property in Year 3.

Cheers

Yours in Finance

I am only aware of one lender who would consider the deal as Residential and that will depend on a few factors.

The Dragon will look at the deal as a Commercial deal as Angel mentioned and certainly not their forte.

Cheers

Yours in Finance

Renae

Want to post some details?

Cheers

Yours in Finance

Hi Anne

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

There are many consideration before going ahead and just doing this.

Remember interest on a redraw which was originally a PPOR is not Tax deductible so that course of action is not wise.

Do you own the property alone or jointly?

What marginal tax rate are you on? etc etc

All of these points need to be worked out prior to making the move.

Your mortgage broker should be able to give you some suggestions and alternatives.

Cheers

Yours in Finance 

Yes Angel Gen Savings required by many irrespective of the lvr.

95% lvr with NGS available but you are not getting this at 6.97%.

Neither of the main LMi companies accept refi out of a instalment contract.

I am aware of one lender who might but would depend on the rest of the deal.

Cheers

Yours in Finance

Without being funny strataman it is very unlikely the Bank will:

1) Want to do it for you and
2) Understand why you even want to do it.

It is not in the Banks interest to uncross your loans as the loose an element of security.
Of course it is in your interest to do so but the 2 matters dont go hand in hand.

Get your Broker to sort out the mess for you and at least that way you now it is done right and in your interest and not the lenders.

Cheers

Yours in Finance

Sorry now i understand I was assuming there was some new LOC strategy i hadnt yet come across.

Firstly i would probably think about uncrossing your loans so that you are able to buy IP #2 without getting further into the mire.

You need to work backwards when calculating the numbers so to ensure you have enough to settle IP2 without incurring too much LMi and also limiting your risk.

Let us assume that the new IP you buy has a purchase price of say $250K and we look to take a standalone loan of say 90% being $225,000. Acqusition costs come to say $15,000 so you are going to need a total of $40,000.

Now we also look to have IP 1 standing alone as well.

Assume that you take out a 90% loan here also so $230K x 90% = $207,000

You then look to take the $40K from IP2 & the $23K from IP 1 by using a LOC secured against your PPOR.

As the IP's increase in value you draw back upto 90% of the increased value and pay down the LOC so that it can be used again to fund further deposits.

You could always use an equity loan instead of an LOC especially if the lender charges a substantially higher rate for an LOC.

Your mortgage broker should be able to map out such a structure for you keeping your PPOR with 1 lender and the IP's separate.

Cheers

Yours in Finance 

Hi Strataman

If the $20K was used for renovation on the IP then the interest will be deductible but if it was for the PPOR then NO.

Yes not normally a good idea to X collateralise your loans but at the moment it is fairly simple to uncross them.
Longer it goes and the more property you purchase the bigger the issue will become.

Cheers

Yours in Finance

Raydenhead, Hate to say "Flying under the radar" doesnt make it legal.

Legislation is in place for a reason in order to protect the interest of investors.

Not declaring your income and pocketing the cash probably wont immediately attract the attention of the ATO but doesnt make it right or legal.

Cheers

Yours in Finance