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Terryw – Thanks for your example, it does certainly puts things into perspective. I'm still educating myself so these maybe silly questions –
Based on your example, if we were to take out a 2nd loan, would it be in our interest to only have one name on the title on the IP for tax deduction purposes?
ryan – I appreciate your encouragement and advice. As much as I would like to jump on the investing bandwagon, i believe i need to educate myself further.
YoungInvestor wrote:Hi Amie,Do you have an offset against the Variable Rate Loan? (It is not possible to have an offset account against a fixed rate loan).
If so, put all the money in there so you are saving interest, but still keeping the cash available for another purchase.
Currently, we don't have an offset account. Will contact my mortgage broker.
Terryw wrote:If you just pay cash deposit for an investment it will not be tax effective.Imagine if you had cash, then paid it into your loan and reborrowed it (using a separate loan ideally). Think of all the extra interest you could claim on your tax.
Indeed. TBH I'm fairly new to this so appreciate your advice.
Qlds007 wrote:Amie who is the current lender as a couple of the 100% plus lenders who are no longer with us arent doing further lending.SGB is the odd exception however it doesnt sound like a Dragon deal.
If you paid down the principal and set up a LOC or similar to say 90% at the same time as you did the refinance you could create the sub account Terry is talking about.
Keeping thing separate will aid come Tax time and also means the interest is deductible and easily recognised.
If you have to refinance because your current lender is no longer in the market or the SVR is ridiculous then bear in mind the LMI costs again.
We're currently with CBA.
Thanks for your input, need to arm myself with more knowledge. I wasn't expecting to have a sudden interest in property.
