- JamesBParticipant@gwiz8Join Date: 2014Post Count: 5
Steve recommends in his book that you should only borrow 80% of the total purchase price and fund the rest through personal income, savings. What if you dont have the extra 20% saved, how do you get started. I own a unit worth around 450, 000 and a 230, 000 dollar loan, does the eqity in this property help?
Any advice would be great :)superAndrewParticipant@superandrewJoin Date: 2014Post Count: 188TerrywParticipant@terrywJoin Date: 2001Post Count: 16,213
WHile you have non deductible debt you would want to borrow 103% of the purchase price of any investment property. If you were to use cash you are virtually throwing money away each year.
You would do this by borrowing against another property – but do not use more than 1 security for 1 loan.Jamie MooreParticipant@jamie-mJoin Date: 2010Post Count: 5,069
Agree with Terry – best to borrow the 20% deposit and costs against your current property. Set it up as a second loan – and then take out a third loan to cover the remaining 80%
Please make sure you keep both properties separate and not cross collaterised.
JamieRichard TaylorParticipant@qlds007Join Date: 2003Post Count: 12,024
Welcome to the forum and i hope you enjoy your time with us.
Ensure that the sub loan secured against your PPOR is a separate loan and then you can look at a standalone loan on the new IP.
With the equity you have in your PPOR you could always look at increasing the sub loan and looking at investing in a higher cash flow investment at the same using the increased income to pay down your non deductible debt.
Yours in FinancePLCParticipant@plcJoin Date: 2012Post Count: 400
Agree with the others.
With the figures you have given, you have about $130K to play with in equity with your current property (before incurring LMI). However structuring this equity release is critical to give yourself the maximum deduction possible come tax time.
This is where a decent broker can be a enormous benefit.
TomJamesBParticipant@gwiz8Join Date: 2014Post Count: 5
Thank-you everyone for all the great advice, I know where I’ll be coming form now on to get guidance :) Looking forward to getting to know everybody!
speak soon :)
JamesRichard TaylorParticipant@qlds007Join Date: 2003Post Count: 12,024
Pleasure James and most of us old hands don’t bite…
Yours in Finance