I have just purchase a new property for 550k which will be rented out. I expect the rental income to be lower than the mortgage repayment
With this, I have 2 properties, the old one which I will continue to live in with a loan balance of 250k.
I am looking advice on how I should restructure the 2 loans, whether to go with interest only and principal plus interest for the new loan and the reason for your advice. I also have the flexibility to restructure the current loan of 250k which is currently on principal plus interest to interest only.
Appreciate your advice.
Many thanks
Does this mean you will now have three properties, 2 IP and one that you will live in?
Are you buying all of these properties in your own name or through a trust for asset protection?
I know, not many answers at the moment but hopefully this would trigger some other more experienced members of this forum to respond.
Without more specifics and your plans, it is hard to give specific recommendations, but as a general rule of thumb………
1. Pay as much as you can off non deductable debt first (ie your own home) and IO on deductable (ie IP's)
2. If you have paid off your home and have nothing else you plan on doing with your money, and do not wish to buy more, by all means, start paying down your other properties.
3. Depending on what else you plan, a Line of Credit as a loan split or by itself, an all in one type account or offset account (again depending on your future plans) or even a basic no frills cheapy loan (for an IP) could all be relevant to you.
My question is however why are you asking for suggestions on restructuring a loan you have only just got? Was it a rush job, or are you not happy with it? Bear in mind, you may have some (will) major break costs or early repayment fees.
If you want to give further details, or even find a finance/mortgage broker locally, preferably one that actaully owns some property, I'm sure you will find the answers and suggestions to get the ball rolling for you. All the best…… AND welcome to the forum.
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