Hi all
Just wanted a bit of directionI currently own a 1 bedroom apartment in the city
It’s worth around 350k and I have around 100k left on the loan
I have aspirations to own a town house within close proximity to the city in the near feature
My question is should I pay down the loan on my current apartment or try to refinance now and then again next year when I plan to buy a town house
Also I plan on renting my apartment once I purchase the town house
And I haven’t refinanced since I got the loan 5 years ago
Any information will be greatly appreciated
I wouldn’t pay the apartment down any further. Instead place these funds in an offset account to be used as deposit funds for the townhouse. I assume otherwise the full deposit amount will be drawn from equity, meaning you have a minimal deductible debt and maximised non deductible debt – not ideal.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Yes it’s best to have extra funds in an offset. But you don’t say which, if any, you will be living in. That makes a difference to what is deductible and what isn’t.
Thanks for the information guys I will be planning on staying on the townhouse
The above applies then. If you do need to draw on equity for the purchase deposit funds, have this setup as a separate split so the deductible/non deductible funds are clearly defined.
And the usual advice to avoid having the two properties cross collateralised.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
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