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I am just wondering now what are the important features I should look for in a line of credit loan? Some that I can think of are:
1. capacity to split into sub-accounts and potentially fix those rates
2. discount on standard variable rate if possible
3. minimal fees
4. good LVR with or without LMI to maximise equity I can access
4. interest only payments
5. capacity to easily access equity for deposit of third property …. is this redraw?Would mortgage offset be important. I plan on keeping personal finances v property investment finances as separate as possible.
James
Thanks Richard and Duckster,
Firstly – I take your point about releasing security, this was originally made as a move to avoid mortgage insurance and as a first degree relative I was able to secure '20%' of the loan against their property to do this. I have had sufficient gains so that I can release this. It worries me that I am 'risking' their property when I don't need to.
Secondly – I had though about a line of credit. I had considered a portfolio loan with St G (ie LOC). I had assumed that this would mean that ALL loans would be with St G and I don't want to have everything with one institution. Am I correct in thinking that I could (1) value the properties to establish amount of equity (2) apply for LOC to either 80% or 90% (+LMI) (3) knowing the amoutn I have available to access on the LOC – I can go to the next bank and get a loan secured against the LOC?? (ie equity).
I am itching to buy but I really don't want to do anything without knowing what structure the loans will take.
