equity

Viewing 4 posts - 1 through 4 (of 4 total)

nzfitness
Member
@nzfitness
Join Date: 2006
Post Count: 1
October 25, 2006 - 10:59 am
My name is bob.I have equity of approximatetly$120k.I am looking at using the equity in my home to purchase my first investment property.
I have talked to my bank and they are able to offer me finance for up to $260,000 at 7.10% over 30 years,with the offset account etc.
I have also spoke to a mortgage broker, and with HSBC,I am able to access up to $460,000 @ 7.10% over 30 yrs.Other knowlage about the bank(HSBC) are unknown.
Would appreciate some help!
Thanks Bob
My questions are:
1. Because I am considering buying an appartment(one bedroom) value $200,000 and living in it,and renting out our home($270,000)What are the consiquences?
2.Do I need more information and what?about HSBC.
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
October 25, 2006 - 12:57 pm
Hi Bob
Tax Consequences are mainly CGT related. You can only have one main residence per time. You can only claim a property as your main residence once you have lived in it. So in this situation you could claim either as your main residence. You will have up to 6 years in which you can continue to claim the first one as your main residence and not pay CGT if you sell. I guess what all this boils down to is, after up to 6 years you can decide to sell one and not pay CGT.
Better change this loan to interest only though to maximise deductions.
2. If you are only going to be borrowing $200,000, then the fact that HSBC will lend you more is irrelevant. Chose the lender that suits your situation best. 7.10% is a good rate though.
Terryw
Discover Home Loans
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JohnSmith
Member
@johnsmith
Join Date: 2006
Post Count: 93
October 25, 2006 - 10:50 pm
Just add – In todays market where deals come and go very quickly, having access to readily available cash can help.
HSBC in the worlds largest bank. Any better or any worse than any other bank? all different and all the same in their own ways
Regards
John
Inspired Finance
(02) 9944 7776
[email protected]
http://www.inspiredfinance.com.au
foundation
Member
@foundation
Join Date: 2005
Post Count: 1,153
October 26, 2006 - 12:26 am
Originally posted by Terryw:
You will have up to 6 years in which you can continue to claim the first one as your main residence and not pay CGT if you sell. I guess what all this boils down to is, after up to 6 years you can decide to sell one and not pay CGT.
If you are considering this, remember to get a couple of ‘proper’ valuations done on your house (not REA appraisals). This is sufficient (according to the ATO current rules) to prove the capital gains occurred BEFORE it was rented out (assuming we’ve seen the worst of the boom already). That way, if you do get stuck with a CGT liability, it will be minimised.
F.[cowboy2]