Line of Credit

Viewing 6 posts - 1 through 6 (of 6 total)

RouiRoui
Member
@rouiroui
Join Date: 2014
Post Count: 2
February 4, 2014 - 9:24 am
Hi,
Just wondering if tis is an option or makes sense?
thought about greeting a loan with a line of credit. It is for our home not an investment.
we have enough money to deposit into the lin of credit for it to be a zero balance from the get go.
is this a sensible option, are we missing anything, or is their anything else we should be asking the bank about!
cheers.
Mick C
Participant
@shape
Join Date: 2010
Post Count: 1,099
February 4, 2014 - 11:53 am
If you pay down the LOC to a balance of $0 some banks will close this out….so your best to apply for a standard loan + get an offset account…
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
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Same Banks. Better Rates. Served With a Passion.
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
February 4, 2014 - 11:58 am
RouiRoui wrote:
Hi,
Just wondering if tis is an option or makes sense?
thought about greeting a loan with a line of credit. It is for our home not an investment.
we have enough money to deposit into the lin of credit for it to be a zero balance from the get go.
is this a sensible option, are we missing anything, or is their anything else we should be asking the bank about!
cheers.
Generally not a good idea, there are serious tax consequences.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email Me
Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
RouiRoui
Member
@rouiroui
Join Date: 2014
Post Count: 2
February 5, 2014 - 12:24 am
Thanks Shape & Terry.
Colin Rice
Participant
@fms
Join Date: 2011
Post Count: 338
February 8, 2014 - 8:48 am
LOCs can be recalled at anytime as per contract, the majority any ways.
Standard loan, Interest Only with an offset definitely the way to go.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
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Perth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
Tamara43
Participant
@tamara43
Join Date: 2012
Post Count: 57
February 19, 2014 - 9:42 am
My husband and I took out a Line of Credit Loan for our Home Loan – Big Mistake- HUGE !!!! Never Again. Apart from the fact we took this home loan out over the phone (mistake number 1), it was never explained to us that if I stopped working and our income was cut in half, that we would be behind the eight ball chasing our tail. We just got deeper into debt and it was a nightmare till we ended up refinancing to a regular standard loan.