looking to buy my first investment property and need some direction on finance.
i currently own a unit with 140k in equity.
i plan to purchase a investment properly with 420k (have adding in stamp duty, conveyance etc) this property will be a joint loan between me and someone else.
mortgage broker recommended i use 80k equity of my ppor and get a joint loan of 360k for the IP. all packaged with my current lender.
both me and my partner have 15k each in the bank but there not advising to use this, im disagreeing as i would like to loan less so that my net gearing is neural not negative.
i went to a second broker who said exactly the same thing.
has anyone been in a similar situation and/or what other options do i have?
im flexible with property prices, mortgage options but am looking to get a neural to positively geared investment.
What they have said is correct as long as the loans and properties are separate. I believe that they are saying borrow the whole amount i.e. 105% of the purchase which you should do so you maximum you tax deductibility. The only thing I don't understand is why you are using $80k instead of around $110k. That way you don't pay LMI (which is what you want) and you maximise your tax.
I don't understand the part where they are telling you that you should use $80k and have a loan of $360k.
Also I would consider getting free upfront vals done on the PPOR to determine the maximum equity available.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
It makes sense to use the equity in your current property to cover the deposit/costs.
Are you happy to chip in the whole lot for the deposit/costs or would you prefer it to be a more equitable contribution between you and the person your investing with? Sorry if that sounds silly – just difficult to know from the original post if your investing with a spouse or a business partner.
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]
thank you all for your kind comments.
after a few sleeps and reading i understand that it makes sense to have all necessary loan amounts on my IP and put any spare funds towards my PPOR
i will question the broker to investigate the LMI fee as if i dont have to pay it great!
PS the partner going in with me is long time GF (7yrs) . she cannot contribute any other way apart from her 13k which it looks like we wont need if we borrow using my equity. im happy with this agreement.
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