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Hi Hannah
The 2 personal loans have higher interest charges on them of probably around 12:5%p.a were as the investment home loan should be around 8.07% just a guestamate
example cost of personal lone to home loan. …12.5% – 8.07% = 4.43% higher .So in a months time when you pay off the first personal loan, you will have those repayments no longer needed as extra cash each month. A good idea would be to add the amount you were paying off the first loan and add it to the amount you are paying on the second pesonal loan,( so you reduce the loan with the the higher interest rate first.) and pay twice the amount or more on the repayment amount to the second loan. the sooner you wipe off this debt the better.
Also ask your lender if you can set up a 100% offset account over the home loan (investment) and put the $8,000 and any income from investment and all other income i.e wages bonuses tax refund ect into this account , so you reduce the interest on the investment loan, pay just the minimum monthly/weekly amount on the Home loan and maximum amount on the personal loan untill you wipe out the 28k personal loan.
If you can pay more off the personal loan all the better as getting this loan paid off should be your No 1 Priority !. When you do wipe it out ..start saving the amount you were paying on the personals loans into the offset and add it to what you should have then accumulated( hopefuly) and search for your next positive cash flow IP.
Most offset accounts come with visa debits A,T.M card and no monthly account Keeping fees and also if you always choose credit when paying FTPOS and pay bills on line (BPay Inter Net) from the offset account you save a little more.
I think if you wrote on your loan contract that the purpose of the loan was to invest, then you should also be able to offset the interest from that personal loan on taxes as it was borrowed for an investment not personal use.
Im not an expert and there are many ways to look at this problem, so check with your accountant or a professional investment adviser for more accurate info.Hope this helps
Kinda is about relieving cash flow, we really want our backyard done and its about a 1/4 of the way there. Also we need to put the finishing touches on the inside of the house to.
If your going to sell the house Great idea maybe …create perceived value ! But; if not mmmmm 25 year liablity is all your refinancing if you think about it.ever watch the add with the little girl telling her dad he needs to find $1:10 petrol to justify the drive ?
GeniusWhat we will do is use that equity next year to build a large pergola and big shed as this will only add value to the my land, or get a IP. (ive read all of steves books and been a member here for 4 years but I still dont know enough but im learning)
Dud doing is what doing does So hope your not procrastinating.As for renting it out, I wouldnt do that as I built alot of this home and im not ready for it to be misstreated in any way at all, kinda more sentimental value than money value at the moment.
if you love the house so much you must love the morgage too its going to be with you for the next 25<30 years so value it.
read the posts again and Steve's books you miss the Ahha's in every post here and on every page of his books
dont take offence I hope you really think and as you said learn from all thats been written here because you have been given a lot of solutions for problems that can get you nearer to paying off your debts, and closer to getting an Ip in the future.but if all you really want is to get your hands on some cash to make your house/ home more comfortable then
go for it and happy renevations ! I wish you well in home ownership.
Dud doing is what doing does So hope your not procrastinating.
if you love the house so much you must love the morgage too its going to be with you for the next 25<30 years so value it.
in every post here and on every page of his books
I wish you well in home ownership.
