Hi Shedin

Probably time to consult an expert in structured lending – Richard who responded above is your man. I'm sure he'll be able to get you back on the right track. 

Cheers

Jamie

Hi Alex

Welcome aboard.

Set up the loan as IO with an offset. When it's time to move onto your next PPOR, take the cash out of the offset and either use it towards your next PPOR or place it an offset that's attached to your new PPOR.

When it comes time to purchase the next property – you may be able to use equity in your first property. This will all come down to the loan amount relative to the value of the property at the time and your banks policy on equity releases.

If you're a terrible saver and will simply make the minimum interest repaymetns each month, then opt for P&I because you'll be forced to pay off something.

Some folk will always insist that P&I is a must – it's about changing your mindset.

Most important above all is to travel. IPs and wealth are great – but traveling while you're young beats everything!

Cheers

Jamie

Hi David

Buying your first property is always an exiciting time.

What are your longer term plans with this property? Do you think it will ever be turned into an IP?

Being on an investment property forum, I assume you're looking to get into purchasing investment properties in the future?

Cheers

Jamie

Hi there

Welcome aboard.

Your post is super long but here's some responses that seem to address most of it:

 – Avoid using cash for IPs, consider placing these funds back into your PPOR and reborrowing – this way, the entire IP debt becomes deductible. Some careful structuring needs to occur here.

 – Change current P&I loan against PPOR to IO now – there's no point paying down this debt further if it's going to become deductible in the future.

 – Generally speaking, if the IP is negatively geared then it's best to have ownership (or a larger percentage of) in the name of the higher income earner. However, IP's do tend to move towards CF+ over time as rents increase – so keep that in mind.

If your current broker doesn't understand investment structures or what it is you're aiming to achieve, then it could be time to contact someone that deals with these scenarios daily. The reality is that most brokers/bankers don't have a clue – but that's not to say your current one doesn't. 

Cheers

Jamie

Hi Dan

Don't worry – most people don't, and it's not usually a question that many broker/bankers ask their clients (although they should).

If you were going to live in it for 10 years and then rent it out – that makes interest only with an offset even more important.

Think about it – if it was set up as P&I for 10 years, that means you've spent 10 years paying down the principle.

When it comes time to convert it to an IP, you would have paid down a massive chunk of the loan which has now become a deductible debt.

By utilising an offset account, you can park any spare savings you have in there instead of paying down the principle.

If you're a terrible saver and will only continue to make the minimum interest repayments and never place any savings into your offset (because it's being spent elsewhere) then P&I can be a better option because it's a forced savings method.

Cheers

Jamie

I use google chrome and it runs nice and fast on the PC and laptop.

Nice one Terry re Internet Explorer  – haha.

Cheers

Jamie

Hi Dan

Welcome aboard.

Personally, I would look to use a smallish deposit on your first given that it's going to become an IP in the future. I'd also set up the loan as interest only with an offset – rather than P&I.

There's a few reasons behind this.

Firstly, when it becomes an investment property, the interest on the loan will become a tax deduction. Therefore, by using a smaller deposit you have a larger loan to claim against. I wrote an article for API mag on this topic recently – it's available here.

Secondly, by setting the loan up as interest only now, you avoid paying down the principle (which is going to be deductible in the future).

Thirdly, by using a smaller deposit, you may be able to retain more of your own cash which can be used towards a PPOR purchase in the future whilst being kept as a contingency fund now. It could also be used to purchase more IPs  – but I'd look to borrow the funds first before using your savings.

Cheers

Jamie

Hiya

welcome aboard.

I wouldn't use the cash in your offset to fund your IP purchases, instead – you could release equity against your PPOR to cover the deposit and purchase costs for each IP. This way, the entire IP debt will be deductible and you get to retain your cash as a contingency fund.

You really need to get a decent accountant and broker on board.

You're starting off from a good base in terms of equity and serviceability (from the info provided) so some careful structuring early on is essential.

cheers

jamie

That's part of the issue.

Some people are so driven by the "lower rate" that they lose focus of the bigger picture.

A $20 a month saving because of a 0.1% discount now can end up costing tens of thousands in missed opportunity later on.

Cheers

Jamie

Hi investor_today

Welcome aboard

It's possible to have the two properties with the same lender without them being cross collaterised.

It just all comes down to how the banker/broker structures the loans.

Most bankers (and brokers for that matter) will simply cross up your loans because a) they don't know any better and b) it's quick and easy to do. This is rarely in your best interest.

If you're worried about your structure not being set up properly then you should seek expert assistance from a broker/banker that deals with investors and know a thing or two about setting up finance structures for investors.

Cheers

Jamie