- mattliasiian wrote:Wow really is it that easy to be misled and have a very bad loan structure?
I mean you know of my circumstances max price $300,000 want to buy for PPOR and than eventually turn it into IP after 3-5 years. Hopefully he will help me choose the best loan structure. Is there anything I should look out for? or really important questions to ask? Thank you so much for your advice I am very new to this and I rather ask dumb questions than make a dumb mistake.
Yes it is. As a lawyer I see incorrect loan set ups daily. Two main mistakes are:
1. cross collateralising loans
2. ruing deductibility of interest – or tax ineffecient loan set ups = losing money.
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
Hey Jamie, yeah I am thinking in the future I will, to be honest don't have a exact time frame but if business succeed and enough capital is gained anything can happen.
Thanks Jamie
Matt
1
See what the Broker has to say and post his response to your questions here.
If the consensus is he is looking after you then i am sure it won't be a problem.
Just make sure he owns an IP or 3 otherwise is hardly going to be best placed to offer you suitable advice for your circumstances.
if not you can re-assess your team of Professionals.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
mattliasiian wrote:Hey Jamie, yeah I am thinking in the future I will, to be honest don't have a exact time frame but if business succeed and enough capital is gained anything can happen.Thanks Jamie
Matt
OK – it's important that you set up the loan as interest only with an offset rather than principle and interest. This article I wrote explains the concept.
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]
Ohh nice thanks for the advice Jamie, if I would say to purchase the property as PPOR instead of thinking about IP for now,and try to pay the property off ASAP, with extra capital from family and to rent out other rooms to family members and charge rent. Would that be better to purchase with principle and interest loan??? I assume you have invested in many IP Jamie or anyone else reading this forum would you normally purchase all your IP's with interest only loans??? I appreciate all your advice.
Thank you
Hi mattliasiian,
Jamie mentioned going with interest only with offset account, NOT principle and interest. Instead of "paying off the loan" on a principle and interest, instead just lump all your spare cash in the offset. In a way it is the same thing as paying off the loan, because the more money in the offset, the less interest you pay. When the amount in the offset is equal to the original loan amount, you have sort of paid off the loan, because you would no longer be paying any interest. The difference is that if you decide to move out the house and keep it as an IP, you'd be able to whip the cash out of the offset and go and spend it on another home for yourself to live in. You would not need to ask anyone's permission to do so, or apply for a loan to do so, or pay a fee to do so – you'd simply withdraw the cash and off you go. If however you had literally paid off the loan in the true sense, and you wanted to get your money back to go and buy another house, you would have to apply for a loan (fees associated), and the bank might say no!!
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Wow thank you Jacqui that makes sense, it sounds easy why doesn't everyone do this or do they already???
Thanks Jacqui appreciate your answer
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