Cheers guys,

I’ll get right onto that literature now.

Thanks again[strum]

Alex

Take action, don’t say without doing! [email protected]

Thanks Steven,

a very straight forward answer, I appreciate that.

There was osme good information from Kiwiproperty in that thread as well,

cheers,

alex

Take action, don’t say without doing! [email protected]

as I work for the bank, probably 1% difference. allowing me to have approx 8% int rate for the personal loan

I realise for others this may not be the most desirable int rate for money used as a deposit.

Getting back to the original question, by the sounds of it this is not a regular practice that you’ve used or seen used?

Originally this was put to me as a way to purchase the first property because you have no issues with getting through the bank’s beaurocratic formailities of the first property purchase. you would then own the initial property outright as the personal loan is not secured. You would then have that first property security for the next, allowing for a surplus of equity.

As you mentioned before, servicability is a concern when using personal loans as you have unsecured debt at a higher interest rate. Once you have a roll on, you would payout the personal loan with the home loan secured against the property. The strategy is a starting strategy, allowing for that well needed roll on.

Can you see that this would not work?

St George (and ANZ), I believe, have a product called the get set loan: a personal loan at 12.2% with a Max of $50k which is allows the customer to draw on the funds and make a minimum I/O payment on only the funds they use. There is no term on the loan as it is a line of credit. Whatever funds you draw on are the funds you incur interest on.

I should have explained this to begin with.

As you can see though, for a short term answer for a deposit this particular loan can be very effective.[biggrin]

Is what you’re leaning towards: forgetting the personal loan altogether and focusing on each property seperately, therefore extending the loan as far as you can take it over the equity of each seperate property??[blush2]

Thanks guys[^] Lots of help, I’m seeing the accountant in the next week or so… will raise the same questions with him. We should always seek the right advice in correspondance to what we want to achieve.
Some of you mentioned the fact that you can’t halve the CGT, there are also many other tax and income advantages with a company based on the periods that you get taxed. Under a company name tax isn’t paid until the end of the financial period and so therefore can be offset against a loss. This can be quite effective when looking to raise your asset collumn while manipulating your tax benefits effectively.[:o)]

Cheers Scully, lots of help….[^]

Scully, wuold you look at getting another valuaton in such short time had you only done a minor amount of work on the property, ie Paint job and small restorations in order to raise property price. Obviously it will depend on the house itself whether you think it’s worth your time and money… what I’m getting at is how relevant do you think think the small things are which make a house look really appealing when it comnes to raising the valued price??

cheers SIS, I’ve followed a lot of your threads in the past few months, learning heaps… keep it up!![^]

Cheers guys.[^] on the topic of re-valuations, many banks/lenders I’ve heard have an issue with re-valuating a property within six months of their last valuation.
What can you do to hurry this process up when in need of freeing up equity??[?]

By increasing the property value, you increase your borrowing power.
Instead of resting on my example, lets throw around a couple of better ones. that was the idea of the thread, not to get caught up on one example.[^]