All Topics / General Property / Security swap / term deposit

Viewing 8 posts - 1 through 8 (of 8 total)
  • Dandare
    Participant
    @dandare
    Join Date: 2020
    Post Count: 0

    Hello all,

    I have an offer on my underperforming house And am going to look for a better property to move forward with my investing via a security swap, My question is,

    what’s the best way to hold funds in a term deposit while I source another property in terms of keeping the costs down? Interest rates are non existent compared to the investment loan rate of 3.30%.

    Thanks in advance!

    Profile photo of JaxonJaxon
    Participant
    @jaxona
    Join Date: 2014
    Post Count: 284

    Are you asking what’s the best way to grow your held funds prior to repurchasing?

    Costs down? do you mean to grow the funds? I feel lost mate.

     

    can you clarify.

     

    Jaxon | Jaxon Avery – Financial Adviser
    http://www.jpafinancialservices.com.au
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    JPA Financial Services Pty Ltd

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    take the profits and apply for a new loan is the best way.

    If you need to keep the loan open see if the lender will allow it firstly. Your only choice would be a term deposit at the prevailing interest rate. The only way to mitigate this is to keep the period between sale settlement and purchase settlement to a minimum.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    https://terryw.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Dandare
    Participant
    @dandare
    Join Date: 2020
    Post Count: 0

    Hey guys

    sorry I should of explained better. I cannot get a new loan At the moment due to income and job keeper, so keeping the existing loan open, currently at 3.3%

    By holding costs I mean I will still have to repay the loan while not receiving any income from the old property, I was wondering if anyone has experience changing the loan to interest only, or owner occupied etc before transferring in the term deposit? To keep the cost of the repayment down?

     

    thanks again for your help, still working on my investor education 👌

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Changing to IO will result in a reassessment.

    Have you spoken to the lender to see if they will allow the substitution of security to a term deposit?

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    https://terryw.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Dandare
    Participant
    @dandare
    Join Date: 2020
    Post Count: 0

    Yes, the lender is Anz, apparently one of the only lenders that offer the service, based on their value Of the new security

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Westpac do it also

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    https://terryw.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Acacia38465660
    Participant
    @acacia38465660
    Join Date: 2020
    Post Count: 0

    This reply has been reported for inappropriate content.

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