Line of Credit on first IP?

Viewing 5 posts - 1 through 5 (of 5 total)

skyh
Member
@skyh
Join Date: 2006
Post Count: 8
August 25, 2006 - 1:41 pm
can we use line of credit for our first IP? given that no home equity is used, i.e. using the IP as the security
or we must either choose P+I or IO for our first IP if no home equity is used?
sam2009856
Member
@sam2009856
Join Date: 2006
Post Count: 79
August 25, 2006 - 1:47 pm
Hi
Confused by your question!
Do you already have you own home (that you live In) or an investment property?
Do you own any property???
If so and it has gown up, then you can use this as equity for your 2nd property??????????
dohicky
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@dohicky
Join Date: 2005
Post Count: 86
August 25, 2006 - 3:09 pm
The line of credit mortgage is just another mortgage product the banks have so it is not tied to having to use your PPOR as equity. you will need a deposit but its up to you how you get that.
The only restriction may be that some lenders may not allow lines of credit for investment properties, that depends on the lender you end up using.
I hope this helps, your question was a bit confusing.
pilihp
Member
@pilihp
Join Date: 2006
Post Count: 26
August 25, 2006 - 10:13 pm
Hi,
A Line of Credit in many ways is the same as an Interest Only loan.
The Lender establishes a fixed amount available based on the security offerred (shouldn’t matter what property you use) & whether of not you verify your ability to repay. This fixed amount does not change until you apply for an increase if security available allows.
Philip Limbert
APM Finance Pty Ltd
[email protected]
Derek
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@derek
Join Date: 2004
Post Count: 3,544
August 26, 2006 - 12:56 am
Originally posted by skyh:
can we use line of credit for our first IP? given that no home equity is used, i.e. using the IP as the security
A line of credit is secured against a recognised asset such as an existing property.
or we must either choose P+I or IO for our first IP if no home equity is used?
After you get the loan whether you choose to pay P and I or I/O is up to you.
If you intend paying the property off then take an I/O loan (most investors do) and make additional payments into an offset account where you can access them later without compromising the tax deductibility of the additional funds.
As with all matters pertaining to loans – use the services of a licensed broker. They can access a number of loan packages rather than being hamstrung by the particular bank you deal with.
The different servicing calculators they use can make a huge difference to the end result.
Derek
[email protected]
The Investors Club http://www.monopoly.tic.com.au
0409 882 958
Skype – derekjones2113