You got quite a loyal following there digger!

Welcome back,

Simon Macks
Mortgage Broker
[email protected]
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

Good advice Pisces.

Simon Macks
Mortgage Broker
[email protected]
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

Sorry mate. Didn’t mean to imply anything or put words in your mouth..

Just found myself caught out in the boom of the early nineties and the tech bubble when I truly believed that the whole fundamentals had changed.

I thought I was Midas [:o)] and all my deals were golden – just the market not me!

I don’t think the fundamentals change easily.

Cheers,

Simon Macks
Mortgage Broker
[email protected]
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

Gina,

Often people get knocked back by one or two lenders and then think that finance just isn’t possible. This is often not the case. All lenders have different requirements and one loan may be rejected by a bank and accepted with an almost identical package by another.

We would need more detail to let you know what we can do.

Either post it here or email if you prefer.

I would need to know about the following:

Incomes and also employment status of both of you.
Deposit and value of current property and who the lender is.

Other debts inc credit card limits.

Family composition – kids?

Anticipated cost of the IP.

Lastly what you see this lending doing for you. ie do you want to buy one property or more? Is rate, flexibility, features important to you etc.

Then we can make some suggestions as to which way you might turn next.

Cheers,

Simon Macks
Mortgage Broker
[email protected]
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

Note it is not necessary to pay a finance broker to put you into one of these loans, they can be arranged by Don Sutherland through our office with no extra costs than the normal bank establishment fees.

Few brokers charge a commission these days Julia. Certainly none of the folks who post mortgage advice here do so as far as I am aware.

Simon Macks
Mortgage Broker
[email protected]
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

Cecilia,

There is no problem with this strategy that I can see except that you might be doing the finance twice – but it does save the uncertainty and stress that comes with the whole application process.

Once the IP settles you can then apply for the new loan you chose. Poss at 80% to avoid the LMI.

The funds from this loan go back into your LOC.

No tax issues as the debts were always taken out for the IP.

The only point of doing this would be to get a cheaper rate and to free up the LOC for the next deal. There is probably no real reason why you couldn’t leave it on the LOC if you are happy. Sticking with the LOC, whilst the rate is higher, will save you the new borrowing costs. If the IP is a cheapie then you might be better off leaving it on the LOC and wearing the higher rate but saving the new loan costs…..

Hope this helps,

Simon Macks
Mortgage Broker
[email protected]
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

Brown Rabbit,

Be careful of redraws.

If you use the money for something other than investments then you will lose the deductibility.

Offset can be safer.

Cheers,

Simon Macks
Mortgage Broker
[email protected]
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

I think you will find that whilst this is currently accepted by the ATO it is still in the High Court atm.

I think the issue is the capitalising of interest.

Some folks allow an IP loan to capitalise while they use two sets of repayments to pay out the PPOR (non-deductible debt). This is called split loans and is under legal action.

Sorry I cannot be more definate but it is a dicey area and not a course I would embark upon without some professional advice.

Cheers,

Simon Macks
Mortgage Broker
[email protected]
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

Speak to an accountant.

I cannot thing of any reason why either of those opstions would make a difference tax wise.

Remember interest is deductible depending on what the loan was used for. Your case sounds straightforward however I stress that you need to check with the ATO or a tax professional.

Cheers,

Simon Macks
Mortgage Broker
[email protected]
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

Serviceability is not a fixed formula. All the banks calculate it differently.

You will need to approach them individually or use a broker who has all of the formulas.

Cheers,

Simon Macks
Mortgage Broker
[email protected]
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.