Hi all,
We have one investment property that used to be a PPOR – owing $315k on it. Unfortunately prior to it becoming our IP, we consolidated some of our debts into our home loan about $85K. As time has gone on, we have kept pretty good records in relation to claiming interest. So we started off on the wrong foot by muddying our loan. But as we are about to purchase another IP, I want to get things set up properly.
What should we do?
Any advice would be appreciated.I would probably refinance the original loan and split it into claimable portions. eg if only the interest on the $85k relates to the property make this one split. and the private stuff another split. Both should be IO.
Then, if you have enough equity, make a third split in the form of a LOC and use that as deposit for the next property. borrow the remaining 80% as a new IO loan.
Make sure your main residence loan is IO and have a 100% offset account attached to this.
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
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