first IP using home equity

Viewing 5 posts - 1 through 5 (of 5 total)

Beata
Participant
@beata
Join Date: 2004
Post Count: 1
March 26, 2004 - 3:35 am
Hi guys,
I am a new kid on the block. Me and my husband are about to purchase our first IP using home equity to have it neg geared. I have some Q’s:
1. For added security we wanted to take out th einvestment loan (interest only) with different lender. It turns out we discouraged to do so by our mortgage brooker- the lender wants to have us in their pocket. Any advice on what to do? Give in to the lender and go for it or stand by our original thought?
2. How aggressive can one be? Take ou max ammount preapproved, buy the best property we can, eat baked beans for next X lengh of time? Or comfortably service the debt- buy something lesser? In a long run ( some 2-3 years down?)we were thinking to move into this IP property and converse our existing home to an investment. That perhaps could justify buying something bigger?
Is this the right way of thinking or are we deluded?
Your opinion we be appreciated
b[blink]
Beata
emf2fJ
Member
@emf2fj
Join Date: 2003
Post Count: 3
March 26, 2004 - 4:08 am
Hi Beata,
I am not sure why you want to move in your IP that you are going to buy in the long run unless this will be upgrade home and turn the other one to be IP.
When time you want to sell that property you will need to pay capital gains even in short period of time that been in rental. unlike now if you decided to sell it you are not paying any capital gains coz that your home. And perhaps look for the home that you really like to live in to upgrade.
In regards that you need to find another lender coz your lender not allowing you to borrow.
I think it will be wise to ask whats the reason. coz if you go to another lender you will end up building that confidence again not like now that they know your history.
Of course they are not the only lender that you can borrow and also shop around coz everyone have different situation.I am sure that you will find the lender that will suits your needs.
ta,
em
richmond
Participant
@richmond
Join Date: 2003
Post Count: 831
March 26, 2004 - 4:11 am
Hi,
Is there any professional package available with your lender that will give you an interest rate discount?
Also, it depends on what the “best” property actually is for you… it could be high yielding, it could have a lot of cg potential, it could be by the beach, in the CBD or a country town/city etc etc… basically, I try to buy places that are tenantable to as wide a range of people as possible, that way your chance of vacancy is reduced drastically. If it’s a property that you want to live in later, that’s fine for some, but the type of place I like to live in doesn’t necessarily have renter appeal… horses for courses
cheers
r
yack
Member
@yack
Join Date: 2003
Post Count: 1,206
March 26, 2004 - 4:39 am
I dont see a problem having the same finance company for both properties. Thats how I got started.
I used the equity in my PPOR and used the title of my PPOR to get 100% finance for the investment property using interest only. That way all the money borrowed on the investment property is tax deductible and I could still pay of the PPOR as much as possible.
Mortgage Hunter
Participant
@mortgage-hunter
Join Date: 2003
Post Count: 3,781
March 26, 2004 - 6:04 am
Yack has the right method, however there is nothing to stop you using the lender of your choice.
Pro Packages are attractive here too. I would be looking at those with you if you were my client. Post here if you need advice re these.
Good luck.
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.