Harry

Couple of answers:

1) When do i start paying the principal and do i have to pay it all at once.
     No you dont have to pay at all subject to the provisions of the loan offer.
     Most lenders have a maximum interest only period before they look to roll the loan over to P & I whilst others
     subject to the LVR allow an Evergreen facility which means it will be IO for the term of the loan.

2) Is it beneficial to make extra repayments in such a situation
     This will depend on whether you have any non deductible debt but assuming NO then subject to having an
     offset account  (rather than the loan account) i would pay all of my income into this account to save $$$.

3) Is it possible  to have a IO loan and hold on to the property for long term( approx 10-15 years)
     Yes subject to 1 above.

4) Any other negatives in such a situation
     Not as long as you are disciplined and dont spend all of the funds in the offset account on non appreciating
     assets.

Firstly thanks very much Andrew for the wrap its a pleasure as you now.

Terry is correct whilst some lenders will insist there is a repayment made on the LOC others will allow the interest to capitalise.

As long as it is not perceived that the loan was set up purely as part of a Tax avoidance scheme i cannot see an issue in this as part of a debt recyclying plan.

Would need a wee bit of careful planning to establish it correctly in the first place.

Hi Darren

Probably a couple of lenders i can think of which would meet you requirements but wouldn't list them on a public forum.

Irrespective of whether it was an investment property or not if he is your partner /spouse as per the OSR definition then you will not qualify for the FHOG.

Hi Vinod

Yes if the mortgage insurance is charged as a result of an application for an investment loan then it is considered as a loan cost and can be claimed over 5 years or the term of the loan whichever is shorter.

I would not be keeping all 3 loans with the same lender if LMI is required as the premiums rise as the loan amount increase.
The threshold for LMI is < 300K / 300k > to 500K / and over $500K.

If you have a couple of properties I am guessing you are in the higher category.

Different lenders and different mortgage insurers charge different premiums so get your broker to shop around.

Might be an idea to take a 95% LVR on one loan and say 90% on the other all depends on the numbers.

I have financed a couple of deals from clients who have purchased through them over the last week or so and both properties appear to have been purchased at less than market valuation.

Certain time constraints when it came to finance approval but all in all as long as you have your structure in place should be fine.

50% Lvr in the current climate is a good loan to valuation for such as specialised security.

Hi Darren

Personally i would look at an interest only loan with 100% offset account and place your salary and any other income into the offset account to reduce the interest cost whilst the property is your principal place.

If you elect to rent the property out down the track and buy again you can always remove the offset funds and use these for your new purchase.

Flexibility is the key when planning ahead.

Thanks Matt appreciate the comment.

Hi Matt

Good to hear about the sale process.

My apologies i may have misread your quote i was under the impression you had thought that the Trustees of the DFT could claim the loss each year.

Your revised understanding is correct.