Hi i have ran into this gem of a property today. I can make an offer of 340k.
I have 50k in savings and a property which is worth 260K and i only own 150K on it
what would be the best way to obtain this second property if i do go ahead with this?
This will be a invesment property i belive stamp duty should be around the 14k mark
cheers
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
I would probably pay $50,000 off your home loan and then get a LOC on this property up to 80%.
-Use this LOC (Line of Credit) to pay for the 20% deposit and costs of the new purchase and then get another 80% loan for the remainder.
-New loan should be IO.
-Home loan should have a 100% offset account attached where all salary and rents etc go.
-Use a credit card with points to pay bills and leave the money in the offset as long as possible.
-Borrow from the LOC to pay all expenses related to the new investment property such as rates, insurance etc. Keep the cash you would have used for this in your offset account.Talk to your accountant on borrowing any short fall from the interest repayments – rental income.
Borrowing to fund investment expenses frees up money for the offset which saves non-deductible interest.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I agree with Terry.
You might like to have both loans as interest only with the offset account attached to the non deductible loan.
What starts out as a PPOR could end easily end up as a IP and therefore flexibility is the key.
Also make sure the loans are non cross collateralised.
Richard Taylor | Australia's leading private lender
Terryw wrote:I would probably pay $50,000 off your home loan and then get a LOC on this property up to 80%.
-Use this LOC (Line of Credit) to pay for the 20% deposit and costs of the new purchase and then get another 80% loan for the remainder.
-New loan should be IO.
-Home loan should have a 100% offset account attached where all salary and rents etc go.
-Use a credit card with points to pay bills and leave the money in the offset as long as possible.
-Borrow from the LOC to pay all expenses related to the new investment property such as rates, insurance etc. Keep the cash you would have used for this in your offset account.Talk to your accountant on borrowing any short fall from the interest repayments – rental income.
Borrowing to fund investment expenses frees up money for the offset which saves non-deductible interest.
Thats some good advice thanks for that Terry,
are you based in Melbourne?
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
Hi Johan
Nope, i am in Sydney.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Johan
This day and age it doesnt really matter where your Broker located as most applications are lodged electronically.
Terry is only an email a way and with his knowledge and experience will serve you better than any more local mortgage broker.
Just drop him a line he doesnt bite.
Richard Taylor | Australia's leading private lender
Terryw wrote:Hi JohanNope, i am in Sydney.
Hi Guys,
Thanks for the advice in the next week or two i will contact you Terry, Can you PM your contact details if possible?
cheers
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
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