Lets assume I borrowed $200,000 to purchase an IP.
I have also been looking to buy another IP but have not found one that I think is worth buying.
I go to the roulette table at the casino & put all my spear cash on Zero & win $100,000 Yee Haaa !!![thumbsupanim]I need to put the money somewhere , so I decide to pay $100,000 towards the mortgage on the IP assuming that I can use the equity later to purchase another IP.
Or would it be better to put the money in the bank & use it as a deposit to purchase IP no 2 ?Or Should I put the money on Zero again to find out if my luck has run out ???
Hi Domo,
Be careful. Say you pay it into your IP loan and want to draw on that $100k for a new car. There goes your tax deductibility.
If you put that money in an offset account against your IP loan you could draw out the money for a new car and that would be tax deductible.spot on qwerty
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 9853 year fixed rate – 6.85%
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Originally posted by qwerty:Hi Domo,
Be careful. Say you pay it into your IP loan and want to draw on that $100k for a new car. There goes your tax deductibility.
If you put that money in an offset account against your IP loan you could draw out the money for a new car and that would be tax deductible.qwerty
My bank charges 1% above the standard interest rate for an offset account.
Do you think that the 1% is a fair trade off for the flexibility it gives you ???It seems that one of the most critical components of an IP the finance structure which may be different for each person.
I am finding it hard to get some good info on finance structure as banks will try to sell you their product & are not financial adviser’s , on the other hand some Financial adviser’s want to sell you products as well !!!!!It seems that the best thing to do is to create a plan & stick to it as best as you can.
Domo Ask your bank for a professional package where it will be the same for a small deductible fee.
Is important to not have a huge tax problem because you tried to save a few dollars now.
I am happy to make some suggestions if you send me some detail.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 9853 year fixed rate – 6.85%
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Domo, you said that your bank charges you an extra 1% above the standard interest rate. Do I understand that to mean that your loan (mortgage) is the current % + 1%?! Just to have an off-set account?
Or Simon, … is this correct? If so, how then is the off-set account such a benefit? That’s an extra $83.33 per month for every 100K. And they make a big thing out of an extra $25 month if the interest goes up by .25%.
Cheers
C@34
Originally posted by calvin@thirty4:Or Simon, … is this correct? If so, how then is the off-set account such a benefit? That’s an extra $83.33 per month for every 100K. And they make a big thing out of an extra $25 month if the interest goes up by .25%.
Cheers
C@34
This is all confusing , has anyone been able to negotiate the interest rate down or is this not done ????
I should also clarify that the 1% extra was charged if I wanted a separate offset account .
If the loan account is an offset account there is no extra charges.Hi Domo,
Don’t deal directly with the banks anymore. Get yourself a good Mortgage Broker!![biggrin]
Example:
Boss at work is with one of the big banks. He deals with them directly on a regular basis because he’s building, releasing equity etc, etc. He feels he’s not getting a good deal so he sees my MB. MB instantaneously gets him the 0.7% professional discount on his current loans that had been running for over a year!!!!!! When my boss asked why he didn’t get this discount automatically they said that he never asked for it!!!!!!!A GOOD MB IS WORTH HIS WEIGHT IN GOLD (and they’re free!!)
qwerty
Thanks for the tip , it’s info like this that can help make a good decision .
If you don’t deal with banks all the time you don’t know the in’s & out’s & any help is appreciated.
[specool]
I agree qwerty [biggrin]
Domo which bank is it?
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 9853 year fixed rate – 6.85%
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Originally posted by MortgageHunter:I agree qwerty [biggrin]
Domo which bank is it?
Cheers,
Simon Macks
Mortgage BrokerIt’s Westpac , they have been ok so far.
My lack of knowledge also led me to dealing directly with the banks as in the old saying
” Safe as houses “.
But times have changed & there are allot of different ways to finance an IP !!!Domo,
Ask your banker or broker about the Premier Advantage Package.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 9853 year fixed rate – 6.85%
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Simon
Thanks I will look into it … [specool]
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