Hi,
I have applied for a top-up loan against my PPOR and just got news back that the bank will lend 20k plus capitalised LMI. The valuation is a bit lower then expected and thus the 20k will only cover the startup costs on the 350k IP i am looking at. My original plan was to get about about 36k from the top-up and use the extra as a deposit on the IP but this will not be possible. I have the cash for the deposit in my PPOR offset account but and unsure whether to use this or to try and get a loan for 100% of the property value.
I am hoping you guys and gals can give my some advise on the right path to go down??
Thanks in advance
If you have funds in an offset account use this to repay your PPOR mortgage and then the new IP loan can be taken out on the increased equity.
This way the borrowed funds become tax deductible rather than using your own cash.
Sounds like a NAB loan to me and if i am right hence the reason why the valuation has come in lower than you expected.
Make sure you loan structure is correct otherwise you will have problems down the track.
Richard Taylor | Australia's leading private lender
Thanks Richard,
That is a good idea.
I just spoke to my broker and apparently i need 20% equity in a property to get a 100% loan and that a 97% loan requires P&I to be paid back. The broker did suggest that there may be ways to minimise P&I repayments but i don't see how….i always thought IO was the ionly way to go when investing in property
I seem to remember that to get IO that you need a 5% deposit and yoru idea could be the best way to get it.
Thanks again
zizzuu
You certainly do not need 20% equity to obtain a 100% loan.
You can get a 100% loan with 5% equity and the loan could be Interest only.Without being funny if your boker has told you this I woulkd be changing MB's.
Richard Taylor | Australia's leading private lender
broker even.
Richard Taylor | Australia's leading private lender
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