Definitely, thanks. When you said ‘If you pay more than the interest you will be reducing the loan amount – but might be able to access it for redraw.’, do you mean to extend the LOC? or establish a separate redraw facility? Not sure what you mean by redraw.
So let’s say I get a $300k LOC and I’ve made all my interest payments and now it’s the end of the loan term and it’s time to pay back the $300k. Wouldn’t I need an additional loan to pay that off? I don’t have $300k of cash. You said earlier I wouldn’t need a new loan as long as I paid a little more than the interest payment required but I’m not…[Read more]
So if you just pay one more cent than the interest repayment on the amount drawn out of the LOC, that’s the way to repay it? I thought you had to repay the whole amount drawn out. For eg: If you take out a $300k LOC, don’t you have to pay back the whole $300k to the bank? You mentioned that ‘generally you will only need to pay the interest’ but…[Read more]
So for example, let’s say I take out a $300k LOC and I draw out $2k monthly. Once I first draw out $2k, I need to begin paying interest on the money that I draw out. When you say ‘if you want to repay the LOC pay more than the interest’, how much more do I have to pay?
I’m based in Australia so I’m simply referring to a LOC that’s being burrowed against the equity of the home.
I understand that once an amount has been used up on the LOC, interest is paid on the amount that’s been consumed right? What I mean is once the LOC is drained (all of the money as been used up), how is it repaid? Do I need to get another…[Read more]
I’m a bit confused about how HELOCs work. Let’s say that I draw out a $300k HELOC and I use it to fund the deposit, stamp duty and other related fees of purchasing an IP (total: $100k). Then I use the remaining amount (300-100= 200k) to pay the monthly repayment and interest on the amount taken out (the HELOC acts as a financial buffer)…[Read more]
If I understand you correctly, the company is the trustee of the trust and I am the director of the company. Therefore, I have full control of my assets but the liabilities fall under the company’s name and not my own, therefore not hampering my personal liabilities.
About the taxable loss, what I mean is that the repayments don’t come out of…[Read more]
Thanks for all that information, really helpful. My question would be this: If I purchase a 700k property as a trustee through a $250k LOC using the equity in my house (LOC funds the 20% deposit, all other associated fees with owning the house including monthly repayments), would this loan structure affect the burrowing capacity of…[Read more]
A fellow novice here. I don’t quite understand why renting is beneficial. Let’s say for eg: You bought a house PPOR for 700k on a interest only loan and burrow the full amount. Just for examples sake. That would result in a monthly mortgage of around $2.2k. By constantly saving and parking excess cash into an offset account, you…[Read more]
I’ve been doing some research into which type of properties to buy (apartment, townhouses, units, houses) and I’ve concluded that townhouses give a solid capital yield (7% per.ann) and decent rental yield (5% per.ann) while having lower holding costs than houses. They are also less expensive than houses and although they don’t provide the…[Read more]
I have around $1 million dollars of equity in my properties ($800k in my house, $250k in my IPs) but I can’t purchase more properties due to my limited income: $130k. It is frustrating because the Commonwealth bank says I can’t burrow enough to purchase another property even though I have perfect credit and a bunch of equity. I did some…[Read more]
Hi Chris and Terry, thank you for both of your replies. To be honest, I wasn’t expecting any replies which I why I’m replying quite late. I don’t use credit cards and have paid off my car loan so aside from my mortgage ($700 a month), I don’t have many expenses. Yup, I’ll definitely look into using other lenders but my main question would be if a…[Read more]
I currently own two investment properties (they have a total of about $250k equity) and I was wondering what I could do to increase my burrowing capacity from the banks, beside the obvious like getting a higher annual income. Even though I have the equity in my house (800k+), I’m unable to burrow more money to buy investment…[Read more]