Hi Helen,
High Flyer is absolutely correct,

In most cases there is no need to include a second property as security over a single loan,
If you don’t have the required deposit and want to avoid X-Coll, simply access the equity in the second property in order to raise the required deposit on the new purchase, The LVR will be higher but the total loan amount remains the same.

“Also, could you explain what you meant by:
The downside to X-Coll, ……. refinancing issues to name a few
Just a few pointers to clarify your comments in relation to refinancing would be great”

Lets assume you have a portfolio of 3 IP’s all X-Colled, the 3rd is the only property that has increased in value, you decide to access the equity available in IP3 for a deposit on another purchase,
unfortunately the bank declines your request for further finance(as they do from time to time)
In this situation you are forced to refinance Three properties across to another lending institution in order to access the available equity in One property, I hope this helps,cheers.

Regards
Steven
Mortgage Broker

[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIA

PLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.

Jason,
Have you considered borrowing the deposit from your parents instead of the whole amount and have the loan and title in your name,
in this scenario a 90/10-non genuine savings type loan product would be an option.

Regards
Steven
Mortgage Broker

[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIA

PLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.

Hi Jason,
You cannot use the funds from a LOC or a Redraw facility for personal use and claim the interest as a deduction.

Your on the right track regarding the offset account, deposits and withdraws via an Offset Account linked to the loan will not effect the purpose of the original loan.

Regards
Steven
Mortgage Broker

[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIA

PLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.

GSSW,
CBA will charge a $300 loan switching fee,

Keep in mind you will be required to make interest repayments if the balance of your loan exceeds the amount of funds in the offset account.

Regards
Steven
Mortgage Broker

[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIA

PLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.

Hi Ozi,
If you intend to purchase multiple properties, then you may want to consider using the $60K towards multiple deposits,

However, If you intend this purchase to be the last for some time, then in this case using all of the $60K towards this purchase may be more beneficial.

Regards
Steven
Mortgage Broker

[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIA

PLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.

I would think long and hard before fixing for 15 Years

Regards
Steven
Mortgage Broker

[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIA

PLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.

Hi Ozi,
You may want to consider using the $60K towards multiple deposits; How far you can stretch the $60K will depend on purchase price and the loan to value ratio (LVR) 80/20 90/10 etc.
Keep in mind part of the $60K will be required to cover purchase costs.

Regards
Steven
Mortgage Broker

[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIA

PLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.

Hi Phil and Kate,
Your Mortgage Broker is correct regarding setting up the Trust First.
On another point, ensure the $90K investment loan is kept separate from your PPR loan.Cheers.

Regards
Steven
Mortgage Broker

[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIA

PLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.

“We had spoken to our accountant about trusts about 2 weeks ago and he suggested buying some properties first and then we’d look at trusts.”

Hi Phill & Kate,
Alarm bells should be ringing,
Did your accountant mention the cost involved in transferring property into a Trust at a later stage?

My understanding is, if your owner occupied residence is in your name it will not be protected by the Trust, asset protection may apply to the investments in the trust, but in this case your PPR is outside the Trust,
Trusts are generally fine if you intend to accumulate a large property portfolio, but if your intention is to acquire 1 or 2 properties then you may want to give it some further consideration,

I’m concerned that you may have been given some pretty doggy advice, please seek competent professional advice before you sign anything,
Cheers, and good luck.

Regards
Steven
Mortgage Broker

[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIA

PLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.

Hi Mortifs,
Your best option would be to contact a Mortgage Broker and have him or her crunch the numbers,

In answer to your other question, Mortgage Brokers are not restricted to writing loans outside of their Home State; I’m based in Victoria and have client’s Australia wide.

Regards
Steven
Mortgage Broker

[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIA

PLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.