amsaini15 wrote:
I think you still have to pay interest on an IO loan. Trev, how could the size of your IO loan increase if you still pay your interest .Terryw, Is it possible to setup loan in such a way to let Interest capitalize and direct all income and rent into PPOR loan. I asked my accountant and he advised this would not be possible in…[Read more]

Your existing loan is separate, so that won't change.The LOC will have a limit of $120,000 but a balance of nil initially. When you take out $30,000 you will only pay interest on this amount. this would be loan 2 as described above.The other way is$320,000 existing loan secured by house.loan of 105% of the new purchase price secured by this…[Read more]

Yep, that is almost right.Your property is valued at $550,000. the maximum loan is usually only 80%.$550,000 x 80% = $440,000 = max loanYou have already borrowed $320k so your max LOC would be $440k – $320k = $120,000If you get this as a LOC then you only pay interest on the amount drawn dawn.When you put the 10% deposit down you take it from the…[Read more]

You would want to pay down the non-deductible debt first. This will save you tax,You would generally have all monies going into the offset and all repayments coming out of this. A variation is to borrow the repayments for the IP loan from the LOC so that your cash stays in your offset saving you interest. This needs careful planning however.You…[Read more]

eg.Your PPOR is valued at $500,000 but your loan only $200,000.You buy an investment for $500,000 and borrow $520,000 using this property and your PPOR as security. (not good!)A better way would be:PPORLoan 1 $200,000Loan 2 $120,000IPLoan 1 $400,00(deposit and costs for IP come from loan 2 on the PPOR. Interest on loan 2 will be deductible and…[Read more]

Do you mean you will not pay the interest on the IO loans, but let them capitalise?There is a tax ruling which says capitalised interest retains the character of the main loan.

You can put your rent where you want to. Best to put it into a 100% offset account attached to your home loan

Do you have a separate loan for the equity release? If not you shouldIf you borrow to invest the interest is generally deductible.You could set yourself up so that you borrow from the LOC to pay the interest, but this must be done properly or you may find the ATO will disallow it.You could have your rent paid into your LOC, but why pay down…[Read more]

They have allowed him to manage two companies which operate as trustess of his SMSF though. http://asic.gov.au/ASIC/asic.nsf/byHeadline/10-160AD%20ASIC%20disqualifies%20Henry%20Kaye%20from%20managing%20corporations%20for%20five%20years?opendocument

I would suggest you park the money into a 100% offset account, save interest and then decide what to do. If you decide to buy a PPOR, the cash will be available. If you decide to invest, use as little of it as possible – keeping it for future PPOR.

I had a client with Bankwest last year applying for less than 80% lend. The valuer made some silly comments about the condition of the property and the bank would not lend for it at all. So even though the value may come in you can still get rejected if there are comments about it being in poor condition etc. The higher the LVR the more concerned…[Read more]

Yes it is very complex they don't teach about this in law schools.Everything is up to negotiation. Whether someone exercises an option or not will depend on their estimate of the value. And with property it is not just value that is taken into account but other factors too – emotions.maybe its better to think with shareseg ANZ is trading at $20.00…[Read more]

Intrigue wrote:
I also heard that the new contract much reflect the same price as the first, thus any profits or cost coverings have to be a seperate deal (very confusing and alittle messy for a new purchaser not to mention gives the appearance of being a bit shady)

I don't think so. The profit for the middle man would be the price the…[Read more]

Let me try:Option – firstly this is an agreement between X and Y where X can buy Y's property, but doesn't have to. Y must sell to X if the conditions are met. So Y is locked in, but X isn'tCall Option is an option where X thinks the price is going to rise. eg.  X buys a $1000 option on a $500,000 property with a strike price of $520,000.  X w…[Read more]

I just took out a NAB loan myself, interest only of course, I think the IO period was for 10 years (but i didn't check too hard). If you want to go for another IO term then they might require some payslips etc. Most people would probably refinance during the 5 years anyway, to take advantage of changing rates, acccesing equity etc.If you are…[Read more]

Also consider what happens if one goes bankrupt. Or worse, divorce. What is a spouse puts a caveat on the property and you are unable to sell – and he/she subpoenas all records related to the property etc.

You used to be able to borrow based on the value if the contract was exchanged more than 12 months ago – with generally no more than the purchase price being available. I am not sure if this is still the case however.

Yes thats true. At 95% LVR you probably couldn't cross collateralise them anyway.

Troodyg – but you can claim it back.

only if there is a profit.