hi everyone
thanks for all the fantastic posts on this site. I have learned so much reading through the forums…
Although I have been educating myself for over one year now on property investment, I am about to purchase my first property.
I am unsure as to if there is a more beneficial type of loan for our principle place of residence, that will get us ahead sooner with investment properties.
Is a variable interst loan the best way to go about it, and pay off as much as one is able, as soon as one is able to then be able to use this equity as deposits for investment properties.
i am so keen to get started with property investments, that this plan sounds soo slow [biggrin]. I suppose the only other option is using other people’s money…
I live in tasmania
cheers so much for any help in advance
anna
[buz2]Don’t Just ‘Put Up A Web Site’…
Build A BusinessYou need to structure your loans so you are paying interest only on your investment property (as it is tax deductable) and p & I on your home loan (non tax deductable). Most variable rate loans are totally flexible so you can make extra payments etc where most fixed loans there are limits on the amounts of extra payments you can make each year. Either go with a partial Line of Credit or a Mortgage offset account with your owner occupied loan and have your rental income paid into this and then make your inv propety loan payment from this.
Try to pay as much as you can off your home is the way to go.
There is no magical loan that saves you heaps of interest. It mostly comes down to paying as quickly and as much as possible. You have to get the daily balance as low as posisble, so the interested added is reduced. You can do this by a LOC, standard variable or IO with a 100% offset account.
Terryw
Discover Home Loans
Mortgage Broker
Click below to email meTerryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Anna
You really need to structure your loan(s) so you can pay your personal debt off as fast as possible as this is not tax deductible. Debt for investing is tax deductible so it is usual to have this as interest only until the personal debt is paid off.
There are a number of ways to structure your finances for fast personal debt reduction and greater profit. Some are much better than others.
Margaret Wilson
[email protected]thanks heaps for the replies guys
Now I just need to do a bit more research and then make the first move in to the property market…
a bit scarey!
cheers
anna
Don’t Just ‘Put Up A Web Site’…
Build A BusinessAnna, try this….
http://www.mortgagepackaging.com.au/index_files/professional_pack.htm
I would also advise interest only.
You can set up the investment loans as you need them. Stay away from a Line Of Credit (http://www.mortgagepackaging.com.au/index_files/line_of_credit_all_in_one.htm) as they are usually more expensive and the main difference is a cheque book.
Find a good mortgage adviser.
Robert Bou-Hamdan
Mortgage AdviserM: 0414 347 771
E: [email protected]
W: http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter: See – http://www.mortgagepackaging.com.au/index_files/newsletter.htm
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty Ltd
If you have spare cash lying around you could put it in an offset account linked to your home loan as it will reduce your interest while giving you a ready on call liquid cash reserve when needed.
I should add to my earlier comment about the main difference between a Line Of Credit and Standard Loans is a cheque book before someone bites my head off.
A true Line Of Credit is also evergreen. This means that it can go on forever. You get approved for a set limit and can draw up to this limit as often as you like. A standard loan has a set-term (amortizes) – usually 30 years.
I consider this difference obsolete in the current market as the average loan term is now less than 4 years as a result of such a competitve market and forever changing products.
Robert Bou-Hamdan
Mortgage AdviserM: 0414 347 771
E: [email protected]
W: http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter: See – http://www.mortgagepackaging.com.au/index_files/newsletter.htm
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty Ltd
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