All Topics / Finance / 2 sperate loans or joining 2 together

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  • seals139
    Participant
    @seals139
    Join Date: 2006
    Post Count: 16

    Currently owe about 65,000 on one property and looking at buying a second property for about 200,000 would it be better to take out 1 loan and pay off the first amount to combine them bot or keep them as two loans?
    Thanks Mat.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    If one is your home loan, it would be better to keep them separate. Even if both are investment it would still be good to keep them separate. What if you wanted to sell one, or to move one to another bank later on??

    Terryw
    Discover Home Loans
    Parramatta
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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    Profile photo of njhansennjhansen
    Member
    @njhansen
    Join Date: 2005
    Post Count: 6

    yeah best to keep it seperate, cross-collateralising is never a good idea for the aboved mentioned reason. Its a common strategy of banks, Bankwest is one example. It increases your risk, if you have to sell your investment for whatever reason you will not be able to because you have the two loans as collateralised as one.

    Profile photo of AnitamarshallAnitamarshall
    Participant
    @anitamarshall
    Join Date: 2005
    Post Count: 79

    I definitely recommend you keep them seperate – most accountants prefer it that way too because it allows them to keep the profit/negative gearings aspects seperate for tax time too.

    If you need to use the equity in your existing property there are ways of structuring the loan to keep them seperate too.

    Anita Marshall
    Advanced Finance Solutions
    http://www.advancefinance.com.au
    [email protected]

    Profile photo of Ol PaintingOl Painting
    Member
    @ol-painting
    Join Date: 2003
    Post Count: 123

    Definitely separate!

    With combined loan it works like a whole untouchable property portfolio.
    But unless you want to buy and forget about for the next 25 years it’s now very usable. You’ll have to go through big hassle (read expenses) if you want to sell one property, or refinance, withdraw etc.

    From the top of my memory you only pay one account fees per combined portfolio. But the amount depends on individual portfolio. In my case with two mortgages 42,000 and 250,000 there would be just few cents a month.

    Cheers
    Lesia

    Profile photo of Mobile MortgageMobile Mortgage
    Member
    @mobile-mortgage
    Join Date: 2003
    Post Count: 913

    In today’s current competitive climate we have lending institutions offering competitive rates with no application and ongoing fees,
    in most situations there is no benefit in combining multiple securities into the one loan, I.e. cross-collateralising.

    Cheers
    Steven
    Mortgage Broker

    Mobile Mortgage Market
    Ph: 0402 483 216
    [email protected]
    http://www.mobilemortgagemarket.com.au

    PLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.

Viewing 6 posts - 1 through 6 (of 6 total)

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