Alistair pleasure mate.

My philsophy anyone who contributes regularly and is good at what they do deserves to be recommended especially to people who use the forum.

Unless it is a private lender you will not find one.

I do a fair amount of private of lodoc private loans but would only ever consider something as a 2nd or 3rd mortgage secured against residential property.

Rob

1) Yes it does have merits but the rent you are paying someone else could go towards your own interest.

2) As interest on your own home is non tax deductible you want to extinquish this debt as quickly as possible. This is one of the reasons you would use a interest only loan on an IP to enable you to apply the additional saving to your non tax deductible debt.

No an interest only loan is a useful tool for a PPOR. Imagine you had done this on your own home and deposited the funds that you have paid of the principal in the last couple of years to an offset account. The net interest charged would be the same but now you woul dbe able to use the entire amount of principal reduction as a deposit for your new PPOR.

The interest on the original loan balance would be deductible rather than the current balance.

Interest only loans can be used effectively in many situations.

Marc

Generally, the rate can't be locked, but I've heard that some lenders will allow you to do that now, except you can only lock in the amount you've already used, you can't make extra repayments on that locked amount. – This is not the case. There are a couple of products whereby you can make upto 10K per annum capital reduction even under the fixed rate LOC.

The only 2 lenders that will consider Expat Poms like myself are the Saffron Walden Building Society and the Derbyshire.

Both lenders will require a percentage of the rental income to cover the loan repayments.

Similar to arrangments in Australia Expat lending is getting harder to obtain due to the security concerns.

HI Bee

This is probably the most common question I get asked by clients looking to upgrade their current PPOR but still wishing to retain the property for investment purposes.

Ok hopefully some constructive answers for you.

1) Assuming you have lived in your current home you can rent it out for up to 6 years at any time and continue to give it your main residence exemption. Of course during this time you cannot exempt another property as your main residence even if you are living in it. Couples are only entitled to one main residence between them. If you move back in after renting the property out for 6 years and then move out and rent it out again you are entitled to another 6 years and so on. If you vacate the property for more than 6 years in a row you can still use the 6year rule to exempt it for the first 6 years.

2) This can be done by either a Cross collateralised loan or doing a standalone line of credit as you have described. There are pro & cons of both but in essence if you were happy to provide the lender with both securities the total of the 2 valuations would be $600,000.

You loan requirements would be the existing $229,000 + $300,000 (new PPOR purchase) and acquisition costs of say $20,000 giving a total of $549,000 or a LVR of 92%.

This amount may of course be reduced by any savings that you have howeverbe careful that these savings are not coming from a redraw on your existing home.

To maximise savings ensure that your current loan of $229,000 is converted to an interest only loan.

3) You would want the property revalued to minimise your LVR and save you on mortgage insurance etc.

This however maybe an ideal opportunity for your mortgage broker to find you a more cost effective product given that your borrowing amount will now increase.

There are several ways of structuring your finance to expand your property portfolio however further information would be required to provide you with a detailed breakdown.

Hope this helps.

Simon

How much are you seeking and what are you offering.

I do a fair amount of short term lending from my SMSF but you might not like my terms – lol.

Let us know.

Jaffa

No offence but commission on an $18000 loan depending on the aggregator may even mean the broker is making a loss and actually costing him money.

The financial gain has little to do whether as a MB i would ever do a deal however for a commecial style loan under $50K i am not aware of too many lenders who would be interested in taking up the proposition.

The management of an $18,000 deal is the same as one for $180,000 and hence lenders are not interested in the smaller amount. it is the same reason many of the Professional packages offer interest and application fee discounts over a given loan amount.

I am unsure as to what your issue is. You appear to have had an approval from NAB at i assume a residential rate. I do personal loans for more than 18K and charge a lot more than housing rates so i think the deal you have is very good.

Hi Mat

Ok You will need to ring My rate and advise them that you wish to raise funds for business purposes. 
See what they say first and then obtain a pre-approval subject to them spending your valuation fee.

Might save you a few dollars in costs doing it that way. 

At settlement the Vendor Solicitors will direct the purchaser to draw the cheques to whoever they are instructed too.

Obviously, where the property is subject to a mortgage the lender will want this discharged and therefore a cheque will be drawn in their favour but the balance net of costs can be draw to anyone.

In saying this of course it has no bearing on Tax liability payable and if fact if it deposited in an account held by someone in receipt of government assistance, pension etc may actually be of detriment if consider an asset.