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  • Profile photo of Michael4Michael4
    Member
    @michael4
    Join Date: 2003
    Post Count: 70
    December 24, 2003 - 5:00 am

    Thanks Mortgage Hunter for the advice.

    Speaking of IO loans most as i can gather is that you can only repay IO for 5 years and then you have to pay the prinicpal.

    If i was about to make extra repayments from time to time while i’m on IO loan does that reduce the interest or Principal as well?

    Just curious because if that is the case then i will be able to buy more properties and if i have any spare cash then make extra repayments and therefore reduce the interest or the principal.

    Am i right or there is something else that i have to take into account as i’m unaware?

    MERRY CHRSITMAS TO ALL !!!!!!!!11

    [8D]

    Profile photo of Michael4Michael4
    Member
    @michael4
    Join Date: 2003
    Post Count: 70
    December 23, 2003 - 2:18 pm

    Hi to All,

    What are the tax advantges of going with either of the options?

    Is it true as long as your returns cover your cost you would be able to borrow even if you choose IP over IO option ?

    [:I]

    Profile photo of Michael4Michael4
    Member
    @michael4
    Join Date: 2003
    Post Count: 70
    December 12, 2003 - 11:51 am

    Hi Ricky,

    Although it is on borderline it’s certainly better than being 250K and rent for $150 per week.

    Having said that you need to be comfortable of what you are doing. Finding PGP (Positively Geared Properties) is not enough if you are not familiar with the area at all.

    My suggestion would be that you should see the area before you commit yourself no matter how good it sounds on paper.

    “Don’t work for money, Let the money work for you”

    [:D]

    Profile photo of Michael4Michael4
    Member
    @michael4
    Join Date: 2003
    Post Count: 70
    December 12, 2003 - 11:45 am

    Hi to All,

    My next questions would be why is what are the tax advantges of going with either of the options?

    Is it true as long as your returns cover your cost you would be able to borrow even if you choose IP over IO option ?

    [:I]

    Profile photo of Michael4Michael4
    Member
    @michael4
    Join Date: 2003
    Post Count: 70
    December 12, 2003 - 11:41 am

    quote:

    Michael

    yes, most banks assess you on what your current repayments are. So if you are using PI loans you monthly repayments would be higher which would mean you have less money leftover to invest, and therefore less borrowing capacity.

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Profile photo of Michael4Michael4
    Member
    @michael4
    Join Date: 2003
    Post Count: 70
    December 10, 2003 - 2:25 pm

    Hi, I’m just a newbie to the forum and i would like to ask what is the most effective option when wanting to keep purchasing properties without running out of borrowing capacity?

    As far i understand with IP loan your repayments would be greater but in the long run would pay off your property quicker then IO but in terms of borrowing capacity in the long term wouldn’t you be affected by having IP instead of IO?

    Any examples would help and thanks in advance!

    [:D]

    Profile photo of Michael4Michael4
    Member
    @michael4
    Join Date: 2003
    Post Count: 70
    December 6, 2003 - 11:50 pm

    HI,

    I would also love a copy of the spreedsheet and thank you in Advance!

    My email address is [email protected]…

    [:)]

    [/quote]

    I have the complete and up to date Land tax rates for all states of Australia in an Excel Spreadsheet. I would be happy to email it to you if you give me your email address.
    [/quote]

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