Hi Pete

If it were me, I would change all of my loans to IO, and save all of the extra money into a 100% offset account rather than pay off Principle – this gives you the option of paying extra when you like, or if you like.

If your properties are not cross securitised, then you could probably take the first one, and borrow up to 80% of the value as a LOC which would give you about $78,000 extra.

You could then use this money as deposits for the next one or two properties.

if you may reside in no. 2. that changes things. I would then put all my spare cash into an offset account linked to this loan. That way if you do not end up moving intothe proeprty, you can just take your money out of the offset account and still claim the whole itnerest on the loan.

I also think it is better to keep all of your loans as separate accounts and to not have all of your loans with the same bank. This gives you much more flexibility with increasing loans and accessing equity etc.

Terryw
Discover Home Loans
North Sydney
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One yar is a long time. Why don’t you write a letter, asking for the payout figure and exit fees and say it is because you have decide to move banks as they won’t give you an increase. I bet they quickly change their minds!

It is better in writing as it can’t get brushed aside by some nobody like on the phone.

Terryw
Discover Home Loans
North Sydney
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I beleive that you can use an existing property as additional security for your wrap proeprty, but once you have onsold a property under a terms contract, you cannot then use that property as additional security for another loan – afterall you do not own the equity, it belongs to the wrapees. LOs can avoid this drama.

Terryw
Discover Home Loans
North Sydney
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If they can get the grant and are working part time, then they may be able to qualify for finance themselves??

Maybe you could lend them 20% deposit instead and take a second mortgage (say 20%) and they could get the finance in their names. You could then avoid paying stamp duty twice and still make a profit and still help them.

Terryw
Discover Home Loans
North Sydney
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If you have a $1 million in loans, then they may offer you a small discount (ire more than the professional package). But usually they will not give you anything untill you threated to move your loans to another bank.

Terryw
Discover Home Loans
North Sydney
[email protected]

Mark

I would say drawing down capital is using cash (or selling assets etc) from the business. LOC is securred against equity, but it is just the same as borrowing, no different to getting a term loan.

Terryw
Discover Home Loans
North Sydney
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Trusts don’t pay tax!

All income of the trust must be distributed at the end of the year to the beneficiaries who then pay tax on this income – including CGT if necessary. You cannot keep the income in the trust – if you do the trustee must pay tax at the highest rate

Terryw
Discover Home Loans
North Sydney
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Marisa

You should seek expert advise on this.

Since you already own the property, setting up a trust will complicate things. It titles are transfered to teh ‘trust’ then stamp duty and CGT may be payable. But since you own the existing house out right and are moving into the new one, it may be better to sell existing to the trust, and use this money to pay all costs assoited with the new one so it is debt free and you have deductible debt on the old one. Very tricky!

Terryw
Discover Home Loans
North Sydney
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Penne

I think the 6 month overlap rule is covered in Section 118-140 of the ITAA. From memory it says you can count two houses as your main residence for a max period of 6 months and give the example of someone having to move into their new house before the old one has sold.

Terryw
Discover Home Loans
North Sydney
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I’ve heard that about 85% of property investors audited were mistaken in their claims (usually not in the ATO’s favour of course).

I agree with the above. Anything out of the ordinary with trigger a red flag. eg if you claim double the average for travel, then they may ask you to substanitate teh claim.

Terryw
Discover Home Loans
North Sydney
[email protected]