If you're buying an IP as well, then as mentioned above it should be ok as long as the existing debt is also fully deductible and the funds go directly on the new purchase.

If you're buying a PPOR then it will cause issues.

Cheers

Tom

The OP must have written to Scott Pape directly as well because in todays Sunday Herald Sun here in Melbourne, in his column the same question was posted.

His reply was "if you have 20% deposit you don't need to go through a rebate broker. That's because NAB's discount brand Ubank currently offers the cheapest variable mortgage, and they don't…[Read more]

In general lenders won't take 2nd mortgages except in some exceptional circumstances. So you would need to take out the loan with the same lender for that particular property as security.

Depending on the circumstances, the lender may allow up to 95% of the property value. Obviously you and the other party would need to meet the lenders policies…[Read more]

headspin wrote:
Hi PLC,  

Thanks, yes this is what I have been hearing also.. 

So if I refinanced and took say $100K from Loan 1 (IP1) and used that as the deposit for Loan 2 (IP2) then any deductions for that $100K must be come from IP2.   Therefore the net result for IP1 is the same.. no benefit.  Its still just as geared (negatively or…[Read more]

Hi headspin,

In your case with what you are planning to do, I would say the equity loan secured against IP1 to be used for IP2 would technically be deductible against IP2. Your accountant or someone else on here might be able to verify or dismiss this.

In the end though the net outcome would be the same.

Cheers

Tom

Hi melbinvestor,

As Jamie mentioned, unfortunately it won't make any difference to the deductibility of the loan and in fact could make your existing loan worse off if you tried to do it.

If it was as simple as you were contemplating, everyone would have their PPOR's paid off and their investment loans maxed out.

Cheers

Tom

I think you will find it hard to locate a mortgage broker who will be willing to give you all their commission, as this is the only revenue that they receive (i.e they don't charge the borrower).

There's a common misconception that the commission brokers receive is added to the interest rate of the borrowers product when it is far from the truth…[Read more]

Might be worthwhile having a comment regarding the banks maximum borrowing being different to that shown or something to that effect under borrowing power.

Cheers

Tom

Mark Coburn wrote:

However if you had bought a House and Land on one contract then the total value of the transfer would be subject to Stamp Duty.

This is where Victoria has an advantage. House and land or OTP sales have their stamp duty calculated on the value of the property at the time of contract (which in most cases will be land…[Read more]

Hi Matt,

For Victoria as of 1st July this year, the First Home Owners Grant (increased to $10K) is only available for properties that are purchased brand new (never been lived in before) or that will be newly built. It is no longer available for old established properties.

There is also a stamp duty discount of 40% that applies to first home…[Read more]

Hi Natasha,

As Terry mentioned, any money you redraw to pay for a new property you intend to live in won't be deductible. You would be stuck with whatever is owing on the current loan once it becomes an IP (assuming you haven't used the line of credit for other personal purposes).

Cheers

Tom

reido30 wrote:
Thank you all again for your input.
Whilst I wish my broker made me aware of this when setting up the mortgage, I'll take the long view here and cop the hit.
I've decided to put a bit of my own cash into the build to bring the LMI down to a more bearable figure.

Thanks again.

At least try to get it to under 90% LVR as that's…[Read more]

In addition to the above, estimate what the standard rent is for the area so after it is returned to yourselves, you can calculate what type of yield it will offer as it most likely won't be near the 8% you will be receiving initially. Depending on what you find, it might not seem like a good deal then.

Cheers

Tom

Agree with Richard above, the loan manager has no pull when it comes to approving the application, what they executed on you was a sales technique.

As for your broker telling you that you can only go with ANZ or Westpac, that is not true. Many lenders out there who do up to 95% LVR.

Cheers,

Tom

Previous tax returns can be changed through amendments (I had to do it once), however from memory the time limit on how far back the ATO allows depends on the taxpayers structure.

As Jamie mentioned, see your accountant and ask them for an answer.

Cheers

Tom

Hi Nat,

As you mentioned that you would have to pay tax on the rental income and your accountants advice on selling the property, it sounds like you would be positively gearing the current property if you rented it out. If so, that's not necessarily a bad thing. All comes down to the numbers.

From what I understand you can move into the new…[Read more]

As Shahin mentioned, the property you are going to live in should have the loan linked to an offset account in which to place your funds. In addition the continuing investment property should be an interest only loan. That way you will maximise your deductibility.

Depending on what you also intend to with the property you move into, it might be…[Read more]

As the above two posters said. Be prepared to spend whatever you feel it is worth and terms you are comfortable with.

Don't get involved in a bidding war. There will always be another opportunity around the corner.

Cheers

Tom

Nigel Kibel wrote:
The problem is that people do less due diligence on an investment property than hey would a blue ray player. If you buy something and regret it because you have not done your own due diligence then you only have yourself to blame.

This is what really surprises me no end. People will do all their homework and consult for…[Read more]

You would think that these "loadings" would in Genworth's eyes be due to the attributed risks with their respective classifications. I can understand self employed, but investment properties, cash out and debt consolidation (considering max LVR is 90%), surely the risks of default isn't that much higher to substantiate the premium increase?

All…[Read more]