I am going to be leasing my current ppor and buying a new property to live in.
I have been advised by the bank to combine the mortgaes into one. Is this the best option I have , it does help me to borrow more but not sure in the long run . I have never owned an ip before so this is all new… Any advice would be appreciated ,Thanks Tass [biggrin]Hi Tass,
I would definitely advise combining the mortgages into one. This will make tax time very difficult for you. You will need to work out every year which portion of the interest applies to your ppor and which applies to the ip. Believe me it’s a pain in the bum!
Also, it would probably end up making you be able to borrow less not more as normally if you have a ppor as well as an ip, you would make the ip interest only as all of the interest on the ip is tax deductible whereas it is not on the ppor.
Further, if you are borrowing a fair sum of money overall, you should be able to qualify for a professional package with most of the big banks which will give you a lower interest rate on all of your loans + you can have as many loans as you want (some that I’ve seen do have a limit of 10 loans) under the one package for around $300 per year which you can charge to your IP to make it tax deductible.
Hope this helps!Thanks,
LuckyoneI would definitely advise combining the mortgages into one.I hope you have forgotten a word here, luckyone :”NOT”. Cross-collateralisation (auch) is a dirty word IMO! It gives the Banks/lenders far more equity than is required AND they can, if the mud hits the fan, force you to sell both properties!
From the rest of your post, luckyone, it infers that you don’t like Xcollarteralisation and it’s a typo, but I just wanted to clarify that.Tass, if you use your existing PPOR, and as you say it is paid off in full (or mostly), there should be enough equity in it to use as a deposit and closing costs for any future houses, be they PPOR or IP’s!
As per other posts:-
https://www.propertyinvesting.com/forum/topic/12514.html
https://www.propertyinvesting.com/forum/topic/12515.html
https://www.propertyinvesting.com/forum/topic/12492.html
If you cobine all these answers into one and still have questions it might be better to pool all the mind capital of this forum onto one post and get the combined effort to discuss you situation. Sorry for being blunt, but spreading the different aspects of your question out doesn’t allow every one to work of the others ideas to give you a better WHOLE picture. So far its prety disjointed.
I wish you well. Read on!Cheers
C@34
Sounds like I would be better off to keep the loans sep… and just pay a deposit of say 10% and take out a totally sep…loan for my new ppor.
Thanks for the input [biggrin]I would recommend a 20% deposit. Can source that from your current loan if needed.
This will save you the LMI.
Do you understand the taxation position of having your equity tied up in your new IP and a big loan against your new PPOR?
Maybe we need to have a coffee – I am in Newcastle too.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985NODOC Loan – 65% Loan – No questions asked!
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hello Simon
No I really don’t understand the taxation side of things of ip /ppor ,all new to me. Well it will be when we do it .
What is your fee and do you make house calls ?You can email me at hethndug at dodo.com.auFee is $0 – this is negotiable though.
Meet wherever you like.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985NODOC Loan – 65% Loan – No questions asked!
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
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