Line of credit OR top-up

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

San
Participant
@santnair
Join Date: 2016
Post Count: 36
September 6, 2016 - 7:14 pm
Hi,
Should I get a top-up on my home loan or get a line of credit?
I will be taking a separate loan for IP(may be from a diff bank) to keep IP and home loan separate. I am getting ready to buy my first IP and using my owner-occupied home equity. My plan is to use the topped-up equity to pay 20% + expenses
Thanks a lot
San
Ethan Timor
Participant
@ethantimor
Join Date: 2016
Post Count: 282
September 6, 2016 - 10:16 pm
Hi San,
Without knowing more about your specific situation, I would probably say refinance. A split might be prudent to keep the purchase of the IP debt seperate from the main PPOR debt.
Hope this helps?
Cheers,
Ethan
- This reply was modified 7 years, 7 months ago by Ethan Timor.
Ethan Timor | Aligned Finance Pty Ltd
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Active Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
September 6, 2016 - 10:17 pm
You should get a separate loan. IO if you can redraw from the loan account, if not then a LOC>
If you top up you will have a mixed purpose loan.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Jamie Moore
Participant
@jamie-m
Join Date: 2010
Post Count: 5,069
September 7, 2016 - 10:47 am
Agree with Terry.
You need a second loan split set up – not just an increase to your existing loan.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
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Colin Rice
Participant
@fms
Join Date: 2011
Post Count: 338
September 7, 2016 - 2:50 pm
San wrote:
I will be taking a separate loan for IP(may be from a diff bank) to keep IP and home loan separate.
This is a sound strategy as you are not keeping all your securities with the one bank.
As already addressed get a “top up” but make sure it is in a separate loan split to keep PPOR debt and IP debt separate for tax and accounting purposes.
Colin Rice | CDR Finance
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Perth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
San
Participant
@santnair
Join Date: 2016
Post Count: 36
September 7, 2016 - 8:03 pm
Cheers guys. Thanks for your valuable input.