This one is going to be interesting so let me start with the back ground.
My PPOR with my wife is in Sydney, we are currently living in Brisbane as I am in the Defence Force and was required to move here. We purchased our PPOR in early 2009 and moved out of it late 2009, we have been renting it out ever since.
I am now considering leaving the ADF and am looking at staying in Brisbane, when I leave I want to purchase a property, ready to move into the day I leave – or close to it – (I already have a new job lined up). I had also made a significant portion of repayments on the mortgage a while back, that I have slowly been trying to claw back by not directly paying the mortgage but rather leave our money in our offset account – so the interest slowly brings this amount down whilst our offset account is growing – (we also use this as our normal banking account). We still have around 60k in the mortgage and at around $1200 per month (after other things) would take years to get back this way. Also it is currently P&I due to it being out PPOR.
My questions are:
1. My mortgage is transferable – is there anyway I can do this by transferring the full mortgage and taking out a new loan to replace it, or can I only take out a new loan to replace what is left on the mortgage meaning I lose this 60k?
2. Is there anyway I can access this 60k to purchase a new PPOR, or is the only way I could do it, to sell my property.
If I cannot get to it, I will still want to take out a loan to replace it at 80% LVR, and have the excess left in the loan to reduce the interest until I can use it for my next investment, so I don't have to take out a new mortgage later.
I obviously want to maximise my monies going into my new PPOR to minimise the mortgage and maximise what I can claim when my current PPOR becomes a permanent rental. (IE purely a rental and not my PPOR being rented out).
Hi Aussie
Hate to say the introduction of NCCP eliminated for all intense and purposes portable loans so in reality you wont be able to transfer the mortgage. Each loan will require a new application, credit assessment etc etc etc.
In saying this from your post i think i think what you are trying to do is maximise your deductions from the old property and use the net funds for deposit on the new property. This maybe possible by way of a Spousal Transfer and depending on which State the property is located could be Stamp Duty exempt.
Again without further information it is difficult to comment.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
If your questioned options don't work out then you can always flog it off into a trust and get up to 105% borrowings on it.
Thanks for the advice Richard, this is why I like to ask questions and keep up with these things as not being in this profession I can miss things like that. When I originally took out the loan it was a feature of the loan, they no doubt would have sent me something about the changes I just probably missed it.
I will have to look into what is best for my situation, however I will still consider transferring the loan – through a new application etc – as it is a special NAB home loan for ADF personnel which must be P&I, its also a package so I think they don't charge any of their fees (I figure there will be a few others though) – I will still be entitled to this after I leave the ADF, and I figure the best loan to be P&I would be my PPOR, and to have all my other mortgages as IO.
I guess what I am really asking is, is there anyway I can access the the extra money I paid into the PPOR loan, whilst not screwing with what I can claim on tax (ie. If i were to sell the house tomorrow, take the cash and buy a new PPOR and then buy the property back with a new loan, the new loan would be 100% tax deductible, but if I take the money I put into my PPOR loan out now I am renting it to someone, I can't claim it on tax, and can't use it for a new PPOR without selling my old one).
No hate to say too late now as it.
You cant even claim a Tax deduction on the interest being charged now you have stopped making payments and allowing the debt to increase back again.
Sure your NAB Banker will confirm that.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Oh, thanks for the heads up on that, I will have to speak to a knowledgeable accountant about this, though as I have the monies in my offset account, the amount of interest incurred each month has not changed, and I have had some monies (DHOAS subsidy) still going into the loan (from the type of home loan it is the subsidy has to go into the home loan).
I have not yet done my tax as I have been lazy this year and am going to do it very soon, a bad think I know but I have had everything everywhere this year, and am just getting on top of all my paperwork. So whichever accountant I use will end up loving me when I tell them this stuff :p
Again thank you for the advice, as it is best to know now and try to rectify it than later when the ATO come down at the worst possible moment.
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