I’m looking at purchasing a property for PPOR. How can get around paying an P&I loan as I would like to pay interest only. the bank is members equity.
Any help would be appreciated
Ask them for an IO loan.
I don’t know their products so cannot advise if they offer one – I expect they will.
All the best,
Simon Macks
Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
I have asked them for an interset only loan but won’t do that on a PPOR.
The background is that we are using family equity for the deal.
What If i said that we were to move into the mother in laws house and rent it out. would that make a difference. The purchase price is $485k and I have caluated $15k for expenses so all up $500k loan.
Any thoughts
Uh, good luck. I really mean that.
F.[cowboy2]Is Members Equity that important…….They have strict restrictions on I/O loans, even to the extent that they will not generally allow I/O during the construction period whilst paying rent also.
The obvious advice here is to find another lender. Ask around or contact a broker.
A broker can be very useful here once he knows what you need. As your friends and family for recommendations or ask around here.
Cheers,
Simon Macks
Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Let me get this straight – you want to rent this house from the bank (admittedly with the option to buy it at current price at any time) for $35,000 per year and then rent it back to somebody else for less? I take it you are absolutely confident that this house will appreciate in value? How much capital gain do you require over what period of time to make this a profitable investment? Do you have a contingency plan if it doesn’t reach this goal?
Cheers, F.[cowboy2]Foundation
I didn’t say anything about renting it for $35k. on paper we would rent it so that we can pay interest only. The reason why we can’t go else where is because the family member who is lending us their equity is with Member sequity and doesn’t want to move from there as she has been with them for a long time and is on an interest rate of 6.55% so out of respect for her and appreciation for lending us her equity we need to stay with members equity.
There must be a way we can make it an interset only loan. Can anyone help?
jewel,
Try this for a safe option for your friend.
Have your friend increase their loan to provide you with the cash you need to qualify for a loan.
You then take your loan with another lender.
This means that should you default or go bankrupt then your friends worst case scenario is they lose the cash they lent you.
Should they be guarantor then they risk everything if you fail for whatever reason.
I would much prefer to see you explore this option.
Cheers,
Simon Macks
Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
What is the LVR against the new property?
How much is being borrowed from the friend’s equity?
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
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