Hi Shralper

There is a free statement checker you can use on our website that Stuart developed.
http://www.prosolution.com.au/ps_docs/prosolution_doc091603_185728.html

Our clients have used it and it has proven to be accurate for them. You should try before you spend $100.[]

Josie

My turn:

Why won’t sharks attack lawyers?

Professional courtesy.

Have a good weekend all!

Perthguy

Something also to consider is that if you are looking to wait 12 months, your property may probably increase in value in that time and you can have it re-valued and borrow against the new value.

Till then you should try and pay off as much off your loan as possible reduce your balance. Every extra dollar counts at the end of the day.

You should try not to cross collatorise – but worry about that in 12 mths.

Josie[]

Hi Harold

You are right, they are one of the very few (if not only one). However, look at the LOC rates Fixed 1 yr 7.00%, 2 yrs 7.25% – perhaps you can get better rates elsewhere.

Josie

Be aware Harry

If the loan is for residential investment – St George will require minimum income of $50K and minimum net assets of $175k.
If for OO – then these won’t apply.[]

Josie

In terms of household savings etc.

You should look at Anita Bell’s book – How to pay off your mortgage in 5 years.
The book only cost about $20 but has heaps of ideas for household savings.

I remember reading it and thinking that some were a bit drastic but overall the savings were there to be made.

Josie[]

Hi One brick

I subscribed to Gardner and Lang’s eBulletin and have found it good reading in relation to commerical property. They are biased towards CP but their discussions on the cycles are interesting.

Find them at http://www.gal.com.au
Look at their eBulletin specifically 2001-01.

I have nothing to do with this site or gal but found it an interesting site.

Cheers
Josie[]

Hi Sterlo

Q1. IO or P&I?
It is advisable to repay interest only on investment property loans for the following two reasons:
a) It is more tax effective as you are only entitled to claim interest expense as an allowable deduction whereas if you pay P&I the whole repayments are not fully deductible as only a portion relates to interest expense; and
b) It is more efficient use of cashflow. Considering you are likely to purchase another IP you are better off to pay IO on IP1 so as to divert as much free cashflow as possible to meet the interest only repayments for IP2.

The only situation I would suggest paying P&I is where you only have one investment loan (and no PPOR loans) and you do not intend to purchase another IP for a while.

Q2: Arranging LOC
Firstly, I would not suggest using a LOC as these products are too expensive outside of a professional package (pro package are availabe for total lending above $150K).
Another point to note is that generally lenders will only lend 80% of a property’s value in respect to LOC products (there are some who lend 90%). There are two ways of achieving the purchase:
a) Use one loan (which balance is equal to existing loan plus cost of purchase of IP2) secured by IP1 and IP2. Note that both these loans will have to be with the same lender as the lenders will requrie a first mortgage over both properties. So if you have your heart set on a LOC product you will not be able to stay with your existing lender for this option.
b) Increase your existing loan by an amount equal to 20% of IP2 value plus costs (eg. stamp duty etc.). Take out a new LOC secured by IP2 for an amount equal to 80% of the value of IP2 with the new lender. This will maximise your flexibility as each separate loan is secured by only one property.

There are a number of issues to consider such as the cost of LMI payable if loan value ratios are above 80%. For more info please visit http://www.prosolution.com.au