Hi Forum
I was at the Brisbane Property Mastercalss on the weekend and noted that Steve spoke about using P&I loans for his investments. I thought however, that it would be better to use IO loans.
Can anybody help to clarify why one or the other please?
I have never heard Steve speak of the benefit of P&I loans nor can I think why he would advocate this. I personally prefer and advise others to utilise interest only loans if they can control their spending.
Benefits include reduced ongoing liability should things get tough, greater flexibility, maximising deductibility (where necessary), enabling faster payment of non-deductible debt (if applicable), less expensive when pursuing additional investment funding and less expensive to access cash (if required).
I would be interested in hearing Steve’s reasoning for P&I loans here.
Robert Bou-Hamdan
Mortgage AdviserIt is a personal decision. Some people just feel more comfortable paying down debt – including Steve I beleive.
I, myself, prefer IO loans like Rob. You then have the option of paying more if and when you chose.Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
The funny thing is that investing is supposed to be treated like a business to be successful. There should be no personal decisions involved. I see no economic benefit of P&I loans on investment properties.
Robert Bou-Hamdan
Mortgage Adviser
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