Hi, I am hoping someone can share with me the strategy to pay off your debt in 5 years. I currently have a mortgage of $400k with yearly income of $100k. Current loan repayment is IO. Rental income is $25k/yr.
Appreciate any strategy sharing or even a comment if this is even achievable/ not. Thanks
Hi Ynchai – a few questions: Do you have a depreciation schedule ? What is the location of the property ? How big is the backyard ? What type of dwelling is it ? (eg House with 3 bedrooms). Is it near a uni or hospital ?
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
It would depend on your future goals out side of the one stated?
Offset accounts if used correctly can be powerful wealth creation and taxation tools.
If you haven't already, it would be a sound idea to "pay off" your mortgage by accumulating funds in the offset instead of paying down the principal loan amount, especially if you are intending to convert your PPOR to an IP in the future.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
Hi JacM,
I don't have the depreciation schedule yet, but i was told it is around $5-$6k yearly. It is one of the new estate located in South of brisbane, house with 3br, 2bath, 1car space.
Hi FMS,
Any clue wher to find information on maximising use of the offset account?
Thanks all for your replies
Is this sort of thing actually possible in a normal scenario? I've seen this sort of thing bandied around and always assumed it was sales puffery.
If it is possible I'm very intrigued…
Hi Ynchai
What are you exactly looking to achieve by paying your house off in full ?
If you are looking to have the house paid off in full so that you can move in to it, put your feet up and relax living life without a mortgage then Dave Ramsey has some really good ideas on debt cancelation etc (www.daveramsey.com).
Please note, he is American based so although his ideas for debt cancelation will work in almost any market, his advice around investing etc is very much based on an American tax system.
Having said that, if you are looking to build a multi-property investment portfolio and are comfortable having debt, then read Robert Kiyosaki's 'Rich Dad, Poor Dad' and start to educate yourself about all things related to property investing. Simply put, if you want multiple properties, doing everything you can to pay off the loan related to your current investment property, as already outlined by several people above, isn't the best approach to take….
Live frugally, rent out some rooms and smash the mortgage (or offset account depending on your situation). That will all help – but there's lifestyle trade offs.
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]
Ynchai wrote:Hi, I am hoping someone can share with me the strategy to pay off your debt in 5 years. I currently have a mortgage of $400k with yearly income of $100k. Current loan repayment is IO. Rental income is $25k/yr.Appreciate any strategy sharing or even a comment if this is even achievable/ not. Thanks
Firstly you should consider whether you should pay off a loan or not – many consequences.
If you want to pay off $400k in 5 years then you must pay an average of $80,000 per year off the loan in addition to paying the interest. Based on that salary and rental income this may be a tad difficult. So think of ways to increase your income and decrease your expenses. Maximise the tax benefits by claiming everything possible that you could claim and go for the lowest interest rate possible – with the features you need.
And finally, it is not a race. Home loans are meant to take 30 years to pay off so don’t worry too much
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
Hi all,
thank you so much for the comments, very helpful, i will give this early repayment a further thought
Dear Ynchai,
Early payment is required to be done but in Offset account. Hence to pay or not to pay is not the question but how to pay is question.
Arun Bhuta wrote:Dear Ynchai,Early payment is required to be done but in Offset account. Hence to pay or not to pay is not the question but how to pay is question.
I don't mean to sound rude – but what does that mean?
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]
Jamie M wrote:Arun Bhuta wrote:Dear Ynchai,Early payment is required to be done but in Offset account. Hence to pay or not to pay is not the question but how to pay is question.
I don't mean to sound rude – but what does that mean?
Cheers
Jamie
Come on Jamie lift up your game! Even my 16 month old son knows what that means!
Lol – does he want a job?
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]
Arun Bhuta wrote:Dear Ynchai,Early payment is required to be done but in Offset account. Hence to pay or not to pay is not the question but how to pay is question.
I am going to be rude and straight to the point!.
Arun, you don't know what you are talking about!. You are dangerous.
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
He lost me on post number 12 let alone post number 37.
I am totally confused.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Qlds007 wrote:He lost me on post number 12 let alone post number 37.I am totally confused.
I can understand posters wanting to help others out, but apart from the bewildering comments what is it with digging up old threads that are clearly dead and buried and rehashing them now?
Cheers
Tom
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