I have been using LOC since the early-mid nineties when Citibank were doing it. We are pretty discliplined and have never had a problem with rampant consumerism
Thus I have found them to be extremely effective. But I see a lot of people like using offsets more so that LOC, I assume because of the interest rate?So I still use a LOC for PPOR and one for investment purposes.
I was wondering if someone would care to write a detailed comparison of one vs the other, and outline the advantages/disadvantages of each as a vehicle for managing debt and building wealth.
Also lets assume that our audience knows little of either.
I realise that everyones scenario is different but are there any general guidelines for people to follow?
EZ-Rent. The freeware tax and cashflow simulator for Australian property investors. Version 2.5 out now!
http://www.ez-rent.comI’d better leave this to be better answered by the brokers and those here who can give a far more detailed and descriptive answer to all of your questions. I use an offset and find it far more flexible and safer/economical than using a loc for my situation. Also, perhaps do a search on this site re” one versus the other?
Cheers,
Gatsby!“Sometimes the hardest thing to do in life is often the best thing to do.”
Been done numerous times and discussed recently at…
https://www.propertyinvesting.com/forum/topic/17907.html
https://www.propertyinvesting.com/forum/topic/17843.html
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential LinksNo.. that wasn’t quite what I am getting at…more an FAQ thing..
Perhaps there is a good website somewhere that makes no assumptions and perhaps explains the concept in this order..
what is a standard P&I loan
what is an interest only loan
deductable vs non deductable expenses
what is an offset?
what is a line of credit
combinations thereofwith a few scenarious to illustrate the points..
etc, etc
EZ-Rent. The freeware tax and cashflow simulator for Australian property investors. Version 2.5 out now!
http://www.ez-rent.comhttp://www.themortgageadviser.com.au/index_files/product_types.htm
Scenarios should always be asked seperately. There is too much variation when considering an individuals own circumstances. There is no single answer that applies to all.
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential LinksI’ve come to this a bit late but agree with ez-rent. An FAQ written in plain simple terms would be a good idea. I’ve visited many MB sites, and have yet to a find clear and well-constructed info that explains these terms. ez-rent enquired re the possibility of some scenarios, this is also a good idea. Scenarios are just that, they are not real, but are invaluable learning tools. Well-written scenarios allow people to adapt situations to their own. This is often what people want. Simple, and often misleading ‘bank’ type explanations do not inform, they confuse. I agree that every situation is different, and that is why ez-rent asked for scenarios. I also agree that there is no “single answer”, that’s exactly why scenarios are used. When you read a book you usually end up applying ‘what-ifs’ to your own situation. Tell me that’s not how you read Steve’s first book… Steve often set scenarios and then asked questions! This is how people learn. Do it via scenario, or do it real. When you’re learning, better to scenario it first.
Cheers
Software for people, not computers.
Programmer, it has been done to death over and over again. Just search for LOC or Line Of Credit and you will have numerous scenarios. You will also find many of your FAQs answered in the many posts. If you cannot find a clear and well-constructed post in this forum, it is only because you have not looked.
In any case, who will pay for a full explanation of all aspects of the Line Of Credit comparison with standard loans including various outlined scenarios???? I have been writing such a document and am up to more than 15 pages and still am not satisfied that it is complete. This does not include the various pages of diagrams!!!
Ask the forum owners or moderators to provide the information you seek as none of the posters have access to making the posts into a ‘sticky’ so you would not have to search for it.
TMA
http://www.email4money.info
Essential Links
First Home Buyer Website…If you cannot find a clear and well-constructed post in this forum, it is only because you have not looked.Actually I did this well before I wrote this message and completely disagree with you, but there’s little use arguing.
I supported this request and still do. I “supported” the request. Who said that I actually wanted the info? I think it would be good for the board.
I’m just a little surprised that you assume so much. You assume I did not have a good look around first, and you assume I personally wanted this information. Gee, hope you don’t treat your clients like that…
I won’t cop out and end it here. I’ll make the request you mentioned. If they don’t agree then that’s that.
Cheers,
Software for people, not computers.
Give it a rest ‘Programmer’!
The informatiion you didn’t want but ‘supported’ IS available. I certainly hope you do a better job of ‘Programming’ (assuming again) for your clients seeing you are not capable of doing a simple search in a forum!
TMA
http://www.email4money.info
Essential Links
First Home Buyer WebsiteLighten up guys.
Thanks
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.
Just to help you along a bit Programmer seeing you are new…
Searching ‘LOC’, I found the following…
• 408 pages in all current and archived threads
• 20 pages just in the Finance sectionSearching ‘Line Of Credit’, I found the following…
• 45 pages in all current and archived threads
• 8 pages just in the Finance sectionWith 15 listed on each page, I think it has been discussed once or twice throughout the forum.
Please don’t tell me that you are suggesting that in all that information available about a ‘Line Of Credit’, you don’t think we have provided numerous Pros & Cons, numerous scenarios and reference to specific products available???
Don’t even bother looking up ‘LOC’. The information you seek is there. Why do I know this – because I wrote it numerous times! So did many others here.
Happy reading!
TMA
http://www.email4money.info
Essential Links
First Home Buyer WebsiteI give up. You win. Hope that makes you feel better.[chill]
Software for people, not computers.
I searched a bunch of old threads going back..
This topic definitely needs a sticky note with some well thought out and constructed materal.. since the threads tend to be answers to specific questions they don’t quite give the full picture (to me anyway).
Even the material on your site which I visited and read is good, but still is a little brief I think for the average newbie – but thats just me and if I’m wrong then I’m wrong..
EZ-Rent. The freeware tax and cashflow simulator for Australian property investors. Version 2.5 out now!
http://www.ez-rent.comI agree about the sticky note. It is a question to ask management and mods though. I have asked in the past for similare stickies only to be refused.
TMA
http://www.email4money.info
Essential Links
First Home Buyer Website
Thus I have found them to be extremely effective. But I see a lot of people like using offsets more so that LOC, I assume because of the interest rate?
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