Steve recommends in his book that you should only borrow 80% of the total purchase price and fund the rest through personal income, savings. What if you dont have the extra 20% saved, how do you get started. I own a unit worth around 450, 000 and a 230, 000 dollar loan, does the eqity in this property help?
Any advice would be great :)
Hi James
Welcome to the forum.
Yes. You can use equity in this property for the 20%. This would allow you to borrow 100% without LMI.
Cheers
AndrewsuperAndrew | Property Analyser and Finder Tool
https://property-analyser.com.auWHile you have non deductible debt you would want to borrow 103% of the purchase price of any investment property. If you were to use cash you are virtually throwing money away each year.
You would do this by borrowing against another property – but do not use more than 1 security for 1 loan.
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
Hi James
Agree with Terry – best to borrow the 20% deposit and costs against your current property. Set it up as a second loan – and then take out a third loan to cover the remaining 80%
Please make sure you keep both properties separate and not cross collaterised.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi James
Welcome to the forum and i hope you enjoy your time with us.
Ensure that the sub loan secured against your PPOR is a separate loan and then you can look at a standalone loan on the new IP.
With the equity you have in your PPOR you could always look at increasing the sub loan and looking at investing in a higher cash flow investment at the same using the increased income to pay down your non deductible debt.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Agree with the others.
With the figures you have given, you have about $130K to play with in equity with your current property (before incurring LMI). However structuring this equity release is critical to give yourself the maximum deduction possible come tax time.
This is where a decent broker can be a enormous benefit.
Cheers
Tom
Wow,
Thank-you everyone for all the great advice, I know where I’ll be coming form now on to get guidance :) Looking forward to getting to know everybody!
speak soon :)
James
Pleasure James and most of us old hands don’t bite…
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
You must be logged in to reply to this topic. If you don't have an account, you can register here.
