All Topics / General Property / Line of credit OR top-up

Viewing 6 posts - 1 through 6 (of 6 total)
  • Profile photo of SanSan
    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

    Profile photo of Ethan TimorEthan 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 10 years ago by Profile photo of Ethan Timor Ethan Timor.

    Ethan Timor | Aligned Finance Pty Ltd
    http://www.alignedfinance.com.au/
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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)

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,436
    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
    http://www.Structuring.com.au
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,068
    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
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Colin RiceColin Rice
    Participant
    @fms
    Join Date: 2011
    Post Count: 371
    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
    http://cdrfinance.com.au/
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    Perth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]

    Profile photo of SanSan
    Participant
    @santnair
    Join Date: 2016
    Post Count: 36
    September 7, 2016 - 8:03 pm

    Cheers guys. Thanks for your valuable input.

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

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