@ Terryw = Aww; this is becomming more and more complicated.
Are you worried about a possible future separation? if so then the courts can make property orders no matter whose name the property is it. Just maintain evidence on how you have contributed to it and not just financial- eg painting the front fence, dealing with an agent.
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
@ Terryw = I hope we don't, but as my parents divorced years ago, I would like to protect myself for the unfortunate. I will keep a record for myself, thank you Terryw.
Our mortgage broker has advised that the IP loan must be in joint names as we do not have sufficient funds to borrow in one name only & that our PPOR will be used as security as we do not have enough funds.
A letter came in the mail approving our IP loan application as follows:
1) A line of credit in both names for $40k
Security is our PPOR
6.96%p.a interest rate
2) Investment Home Loan in both names for $431,439 I.O with monthly repayments
Interest period 5 years
Security – nothing listed
6.56%p.a interest rateI have a few questions to ask you all before I sign;
* What happens to the interest period after 5 years? Does it turn automatically into P&I?
* Is it ok that we have our PPOR as security? I know it is best not to, but if this is the only way to borrow are we best to do it and be in the property market rather than wait a few years?
* We make fortnightly repayments on our PPOR, should we do the same for the IP or leave it monthly?
* Have I missed anything important?your PPOR should only be security for the LOC (and original loan). The IP should be the only security for hte investment loan.
You should not be paying the investment loan fortnightly as this would mean extra repayments – these should be going to the PPOR loan (not the loc) as this is non deductible.
IO would revert to PI.
Why is the loc interest rate so high? If that with a different bank?
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
tigermiger wrote:Our mortgage broker has advised that the IP loan must be in joint names as we do not have sufficient funds to borrow in one name only & that our PPOR will be used as security as we do not have enough funds.
Does your mortgage broker own investment properties? Does he/she usually deal with investors?
They have crossed up your loans and I doubt that this was your only option.
Have you asked your mortgage broker to answer your questions? They're getting paid to do this work so should be readily available to respond to any questions.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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