Hi Mr Taylor,

I was told before that between two lenders, the loan amount can vary as much as $300k between two lenders based off the same information (income, credit score, debt etc) Is this not true?

Cheers

Definitely, thanks. When you said ‘If you pay more than the interest you will be reducing the loan amount – but might be able to access it for redraw.’, do you mean to extend the LOC? or establish a separate redraw facility? Not sure what you mean by redraw.

So let’s say I get a $300k LOC and I’ve made all my interest payments and now it’s the end of the loan term and it’s time to pay back the $300k. Wouldn’t I need an additional loan to pay that off? I don’t have $300k of cash. You said earlier I wouldn’t need a new loan as long as I paid a little more than the interest payment required but I’m not…[Read more]

So if you just pay one more cent than the interest repayment on the amount drawn out of the LOC, that’s the way to repay it? I thought you had to repay the whole amount drawn out. For eg: If you take out a $300k LOC, don’t you have to pay back the whole $300k to the bank? You mentioned that ‘generally you will only need to pay the interest’ but…[Read more]

So for example, let’s say I take out a $300k LOC and I draw out $2k monthly. Once I first draw out $2k, I need to begin paying interest on the money that I draw out. When you say ‘if you want to repay the LOC pay more than the interest’, how much more do I have to pay?

I’m based in Australia so I’m simply referring to a LOC that’s being burrowed against the equity of the home.

I understand that once an amount has been used up on the LOC, interest is paid on the amount that’s been consumed right? What I mean is once the LOC is drained (all of the money as been used up), how is it repaid? Do I need to get another…[Read more]

If I understand you correctly, the company is the trustee of the trust and I am the director of the company. Therefore, I have full control of my assets but the liabilities fall under the company’s name and not my own, therefore not hampering my personal liabilities.

About the taxable loss, what I mean is that the repayments don’t come out of…[Read more]

Hey Terry,

Thanks for all that information, really helpful. My question would be this: If I purchase a 700k property as a trustee through a $250k LOC using the equity in my house (LOC funds the 20% deposit, all other associated fees with owning the house including monthly repayments), would this loan structure affect the burrowing capacity of…[Read more]

Yep, I’ll definitely have a look. Thanks a bunch guys, I appreciate it :)

Hey Mark,

A fellow novice here. I don’t quite understand why renting is beneficial. Let’s say for eg: You bought a house PPOR for 700k on a interest only loan and burrow the full amount. Just for examples sake. That would result in a monthly mortgage of around $2.2k. By constantly saving and parking excess cash into an offset account, you…[Read more]

Hi Chris and Terry, thank you for both of your replies. To be honest, I wasn’t expecting any replies which I why I’m replying quite late. I don’t use credit cards and have paid off my car loan so aside from my mortgage ($700 a month), I don’t have many expenses. Yup, I’ll definitely look into using other lenders but my main question would be if a…[Read more]