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Hi and welcome to the forum
I don't know the specifics of those suburbs but there are many investors on this forum with properties in West Syd.
Yes, the socioeconomic situation isn't the greatest but as you've mentioned – the buy in is relatively low (compared to other parts of Syd) and the yields are quite good. I'd be looking for something with value add potential. Perhaps something where you can generate a second income stream through a granny flat, etc.
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]
booge wrote:As far as IO goes, at what stage do you pay down the principle? Or is it just left IO until you sell it? Always wondered what people did and why in this situation.As Richard mentioned above your post – you roll it over into another IO term.
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 Melvin
I'd just take up Richard up on his offer above. Get a pro to sort it out for you – that way, you don't need to worry about the structure.
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]
Solomon10 wrote:I have wondered this too for a ppor,suppose im quite sure i will be there a while, what is the difference for having say a 200 k mortgage with no offset,paying it down to say 110 k,to having it the same 90 k in an offset account? Will the ato be sus if i found another house to live in and just pulled my 90 k out to use on the next house?If the $90k is being used for an IP it should be deductible. If it's being used for a PPOR it won't be.
If you have $90k sitting in your offset and moved it on to your next PPOR, you would have boosted your deductible debt by $90k (which is a good thing) and reduced your non-deductible debt by $90k (also a good thing).
If you have a slight inkling that your PPOR will one day become an IP, don't pay down any more principle. I wrote an article for API magazine recently on this topic – it's available here
Cheers
Jamie
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]
Paullie has provided excellent advice above. If you're an undisciplined saver and will only make the minimum interest repayments then IO with an offset is not for you.
You're not necessarily drowning in debt if you make regular repayments into your offset and avoid withdrawing (unless it's for a good purpose).
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 Melvin
What is the current value of your PPOR and what is the current loan amount?
The scenario above – is that the IP you are intending to purchase?
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 property seeker
It's a dangerous strategy and given the new credit legislation it shouldn't be possible as you need to identify what the LOC will be used for and "living off equity" ain't going to cut it.
You're assumption is correct. Your debt will continue to rise. Therefore, you're relying on your portfolio to continually grow in value. What happens when the market stagnates for a few years or goes backwards?
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 Liz
Welcome to the forum.
My preference has always been to purchase the PPOR first and then use it as a stepping stone towards your first IP.
How? Look to purchase something that can do with a cosmetic renovation. Nothing structural/difficult – just simple stuff that will add immediate value such as new paint, flooring, ect.
After that, have the property revalued. Hopefully it's gone up and you can access this newly found equity to use as the deposit/stamp duty on your first IP.
Just my two cents – others will have a different take on things.
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 Chris
Another thing to note is that ANZ are just one lender with one way of calculating borrowing capacity – and their calculator is not the most generous. If you are able to (and want to) service a higher loan amount then there are other options.
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]
Might be worthwhile getting a second opinion and having someone like Richard take a better look at the current structure and your options for moving forward.
As Richard mentioned above, not all lenders taken into account 100% of the debt when you hold the property with another party.
In example, we recently arranged finance for an IP for a client whos partner wasn't interested in investing. The lender we used only took 50% of the liabilities the married couple had – this enhanced the clients borrowing capacity and she was able to invest.
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]
I’m with you – I would have thought the final condition report would put an end to things. I’d argue the case with the new PM. Have they released your bond?
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]
I agree with Terry and your broker. This will ensure the total borrowings against the IP is deductible and you get to hold on to your cash savings.
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]
You can work out interest only on a calculator.
Loan amount x interest rate = interest payable per annum
Divide interest payable per annum by 12 to work out monthly repayments or 52 for weekly.
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]
Paullie wrote:boogeIf I were you, Id refinance the PPOR as interest only with offset and the IP as IO.
Put any extra money into the offset for your PPOR.
This way you are taking full advantage of the deductibility of the IP loan.
The reason to have the PPOR as interest only with offset is in the future if you move house and that becomes an IP, you can shift the funds from the offset to the new offset of your nre PPOR, thereby once again taking full advantage of the deductibility on the IP.
Spot on.
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]
I use broker software but this link does the trick – http://www.infochoice.com.au/calculators/home-loan-calculator/
The only difference should be whether it's P&I, IO and the term.
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]
Your broker should be able to advise on the best structure. If you have any doubts about the way they're approaching things – then contact any of the decent brokers on this forum and they'll be able to sort it out for you.
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]
Never reduce an IP loan if you have a PPOR loan.
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]
I'd opt for option 1 so as you can limit the amount of LMI payable.
Your broker/banker should be able to run through some scenarios with you on the cost/benefits of a few options.
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]
Michael's point above is a good one. Your broker should be able to advise on which lenders provide this service.
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]
Sounds like your bank cross collaterised your two properties at the start – what you've described (having to reduce the LVR to below 80% is a characteristic of this).
Technically, what your broker is saying is correct. However, you're in quite a unique situation and your accountant is supposed to be the "tax" expert.
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]
