What is cross collaralised ??

Viewing 4 posts - 21 through 24 (of 24 total)

« 1 2

Richard Taylor
Participant
@qlds007
Join Date: 2003
Post Count: 12,024
February 27, 2007 - 11:46 pm
Crusade
A LOC on an IP are you sure that was wise.
You maybe talking about $300 to cover you release and transfer fees to an altenative lender but that may not be necessary. Have a look at the structure and you may be able to stay put and just get the securities re-worked.
If this is not possible then i assure you the costs of moving will be very worth it in the end.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New Shared Equity scheme has arrived – Email us for details.
Richard Taylor | Australia's leading private lender
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
February 27, 2007 - 11:49 pm
Hi Cruisader
The banks fees for release of security is about $300.
So if you have a LOC setup, you could use that for deposits, but if you have already been using the LOC for other non-business purposes, then it would be better to have a separate one.
Once you start using the LOC for business, stop having your wages etc placed in there. Just pay the interest each month. If you want somewhere to park wages, rents and spare cash you need to set up a 100% offset account, otherwise it will be a nightmare at tax time.
Terryw
Discover Home Loans
[email protected]
Send an email to get my newsletter.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email Me
Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
raddles
Member
@raddles
Join Date: 2006
Post Count: 187
February 27, 2007 - 11:57 pm
Hi there Richard
could I just get you to clarify your concerns with respect to a line of credit over an investment property
crusaider
Participant
@crusaider
Join Date: 2007
Post Count: 11
February 28, 2007 - 12:11 pm
Thank you Richard and Terry for couching.
I did not need LOC as I was ahead of paying my home loan. I followed one of the basic rules to eliminate the non tax deductable loan first. When I finally paid it off, I have asked for LOC on one of my IP loans as I did not want to wait until I save enough for a deposit. The plan is to use LOC only as a deposit for my next IP (when I find one).
I actually have 100%Offset Account to park my wages these.
Retrospectivelly, I should have left my home loan open with a few hundred dollars left on it and have the extra cash available for other IPs. Then I would not need to set up LOC. What is the downside of having LOC on IP loan Richard, could you please explain?