New loan or line of credit

Viewing 7 posts - 1 through 7 (of 7 total)

Deano76
Member
@deano76
Join Date: 2009
Post Count: 10
February 8, 2009 - 8:36 pm
Hi guy's just wanted to know if you guys get a new loan for each IP or do you set up a line of credit and have all your IP together with financing?
Thanks
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
February 8, 2009 - 10:54 pm
new loan for each property. I would never have one big loan.
When, or if, you get some equity, then get a LOC as well – but each property stand alone, no cross collateralisation.
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
Richard Taylor
Participant
@qlds007
Join Date: 2003
Post Count: 12,024
February 8, 2009 - 11:24 pm
Agree with Terry keep things separate and simple.
There is one Financial Planning franchise doing the rounds that recommend a big line of credit against of your securities and all you do is simple increase the limit once the properties rise in valuation.
This is fraught with issues and certainly could not recommended by me.
Richard Taylor | Australia's leading private lender
Deano76
Member
@deano76
Join Date: 2009
Post Count: 10
February 9, 2009 - 9:02 am
Thanks guys, I may be needing your services very shortly.
Richard Taylor
Participant
@qlds007
Join Date: 2003
Post Count: 12,024
February 9, 2009 - 9:04 am
No dramas Deano you now where we are lol.
Richard Taylor | Australia's leading private lender
emptyvessel
Member
@emptyvessel
Join Date: 2008
Post Count: 170
March 1, 2009 - 1:01 am
Variation on this question if I may?
I am building my PPOR right now, due to be finished EOY09.
Keen to purchase investment property before PPOR is finished building.
IO Loan expected to be $500k. (~$210k paid off right now, expect to be up to $230k by EOY09 based on conservative budget estimates)
Highest tax rate and enough cashflow to fund the IP purchase up to around $400k reasonably comfortably.
What is the most effective way for me to structure the loan to purchase the investment property?
If the home was finished, I would be thinking of an LOC on the PPOR to fund the smallest practical deposit with a different lender on the investment property. OR
Redraw the funds from PPOR loan to put into the IP loan?
Any advice appreciated.
Emtpyvessel
Richard Taylor
Participant
@qlds007
Join Date: 2003
Post Count: 12,024
March 1, 2009 - 9:07 am
EV
Regretfully funds taken from a redraw will not be tax deductible so not an ideal situation.
A separate loan maybe possible even a LOC depending on your lender as a lot will not advance further funds until the building has been completed and the final certificate provided.
Richard Taylor | Australia's leading private lender