All Topics / Help Needed! / Using the equity in my investment property?

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  • Profile photo of RissRiss
    Member
    @riss
    Join Date: 2007
    Post Count: 3
    February 12, 2007 - 10:43 am

    Hello.

    I have 2 properties – my own home and my investment property.

    Would this be possible?
    If I were to move out of my home (live somewhere else) and rent my own home out, can I then borrow from the equity in my investment property to pay off my home?

    Would there be any penalties if I was to move back into my home later? Is there a certain amount of time where this would be acceptable?

    Thank you.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    February 12, 2007 - 12:56 pm

    Whats the purpose of the loan?

    eg.
    $100,000 loan on your $300,000 home
    $100,000 loan on your $300,000 investment property.

    If you were to increase the loan on the investment property to $200,000 you could pay out your home loan. You’re IP loan will then really be two loans of $100,000 each.

    Deductibility depends on the purpose not the security. So when you move back into your home, the interest on the second $100,000 won’t be deductible as the loan is for your home.

    Terryw
    Discover Home Loans
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

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