Forum Replies Created
- Terryw wrote:That rate is a bit high – how much is the loan amount?
Would be best for you to pay the min on the investment loan and any excess to the PPOR loan – so this means monthly, otherwise you would be making an extra month's payment to the IP each year.
If your PPOR would become an IP in the future then probably best from a tax POV to change it to IO, but this also depends on your spending habits. Some would be tempted to spend money in an offset account.
IP#1 LOC Loan for $280K valued at $600k
IP#2 LOC Loan for $270k valued at $410kDoes the block have an easement out the back.
The biggest mistake I see with garages is they get converted to a room and provide access through another roller door to an easement out the back. Make sure this is not the case. And also think about where you will put the windows. You can't look straight into the neighbours house if you are already built up on the boundary.Get a designer/architect involved first. They can check your plot ratio (as you are adding Floor area) and investigate your house to come up with a solution for you. If you build underneath apart from termite protection, waterproofing and structural advice may also be required.
LOC is 6.6%
Should I change from fortnightly to monthly payments?
Is there any benefit to change to a new IO loan at a different bank?
And should I change my PPOR P&I loan to IO loan with an offset account at the same time?I asked for IO loan and they advised that they only had LOC. I pay fortnightly because its easier to budget that way. Have I got this set up wrong?
That's what the bank recommended as they were both previsouly P&I.
I guess the other thing I could do would be to use the equity in my IP and use it for another IP eventually.
Thanks all.
We actually lived in the IP first. So does this mean that I won't pay CGT? The other option is to sell this outright before the 6 years is up.
Yes we will have to pay stamp duty about $26k and then legals about $2000.Qlds007 wrote:As Dan mentioned you can certainly increase the loan (Dont know why you would) but can claim the interest on the increase as a deduction so really no point.
If the property is owned as Joint Tenants you could however look at possibly buying at your spouses share and the interest on such a Transfer would be deductible.
Other costs to be considered but depending on your marginal tax rate may well be worth.
Its been awhile and I’m still learning this tax game….As an update we still have 2 x IP’s in both my and wife names and our PPOR in both names. I’m interested in somehow increasing the loan on one of our IP through equity and put that onto our PPOR. Our IP is a LOC/IP loan that has $280k of debt while the house is worth approx. $600k.
Qlds007 – How does selling half the IP to me work? And by doing this allow me to claim the full amount of tax on that IP?
Thanks everyone, we are still learning all this. I believe its better to keep the IP's and pay for what they were when we bought them rather then sell pay CGT etc, and then buy new IP's at a future price.
We are currently paying the minimum off for our LOC / IO loans for our IPs, while everything else goes onto our PPOR. Although we are not using an offset account rather a normal savings account to do this – I better go talk to the bank….again.I don't want to sell anything, it's my partner who wants to reduce the debt on our PPOR. She wants to pay off our house asap. I see it that our IP money/rent helps to pay off our PPOR, is tmy thinking correct? Also you siad I have never made a repayment in my life – can you explain how you did this?
Or just keep going where I'm putting the left over rent money onto my PPOR and will slowly bring the loan down.
Thanks Dan & Qlds007 I really appreciate your time.
So are you saying not to increase the loan on my IP in order to bring down my loan on my PPOR? Or is it better to sell my IP to help pay off my PPOR and then buy another IP later?
Thanks. I assume the option of increasing the IP loan to pay down the PPOR loan is still the way to go.
That would be good.
Thanks Melbear.
We don’t wont to sell our townhouse because it will become a great rental property. We can get about $280 per week and we bought it in 2000 for only $120k. We have 70k left on the loan, but we have decided that we need a bigger house (family soon) and that we can afford a three bedroom house on the outer suburbs. Going to put everything on the new house loan, while paying minimum on the current townhouse loan. Then once in a better position use equity to buy more IPs, while still paying off as much on PPOR. This is the aim – thoughts on this.Simon – what is a IO loan?
Thanks for all your posts. As you probably can tell, I’m new to all this and here is my situation:
We live in a two bedroom townhouse but want to upgrade to a three bedroom house. We have enough equity to borrow for %110+ of a loan and this new home will become our PPOR. Our old townhouse will become our IP but still have a loan on it.It depends entirely on your timeframes and comfort.Timeframe – My partner and I are young, 25 years old
Comfort – Want to sleep at night.Don’t you think saving 20% of the deposit would work out better in the long run, less interest paid on the loan, no insurance costs etc?
Checked witht the body corporate, can’t do anything to the exterior, and the living area is already to small to put another room in.
