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  • Profile photo of WombatsInvestWombatsInvest
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    @wombatsinvest
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    July 18, 2012 - 12:30 pm

    Legendary!

    Starting to think i should have used an independent mortgage broker, but fingers crossed there’ll be a next time :)

    BTW some good advice on your links!

    Thanks Again to all

    Profile photo of WombatsInvestWombatsInvest
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    July 18, 2012 - 11:18 am

    Thanks Jamie,

    Much appreciated.

    To re-iterate it will be an investment property after 6 months, so i think this would definitely be the way to go.

    I’ll have a look at your links and come back if i have any questions. Thanks also!

    Also if you have any suggestions as to the term for the IO it would be much appreciated!

    Profile photo of WombatsInvestWombatsInvest
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    July 18, 2012 - 10:49 am

    I knew there was something else…

    Is it also possible to make a lump sum payment on the IO loan (with an offset account) and it make a big dent on my principal? Or does the IO loan with an offset account not really work that way?

    Again from what i understand it would be better to just increase the amount of money in my offset account and then use that later for another deposit instead of the equity?

    Profile photo of WombatsInvestWombatsInvest
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    July 18, 2012 - 10:45 am

    Thanks Tom & Finance Guy,

    It seems like this is definitely the right way to go!

    I think this has answered all my questions, unless there is a reason i should go 5,7 or 10 years IO, or look at doing 50% instead of 100% offset?

    Thanks Guys,

    Profile photo of WombatsInvestWombatsInvest
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    July 18, 2012 - 10:10 am

    Thanks for the quick reply, that sounds like some good advice!

    Unfortunately i think i wouldn’t have much change left from the rent (event with the IO loan repayments) – this is just due to the expected rental, however it certainly would make sure that i don’t have to pay much extra to service the loan – although this would mean that the loan wouldn’t be negatively geared.

    Moving forward then (gearing up for my next property), if i am not paying off any principal for the next 10 years with my regular repayments, would it be worth making additional payments on my loan to reduce the principal (does it work like this) and then redrawing on those repayments later down the track for the deposit on another one, or would it be better to just pile all my excess cash into an offset account (after the personal loan has been repaid) and then use this money as the deposit?

    Sorry for all these questions, i’d just prefer to get it right the first time :)

    Profile photo of WombatsInvestWombatsInvest
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    July 18, 2012 - 9:42 am

    BTW I’m also going through CBA (have always been with personally and with my business so i’ve had a good credit rating), so i’m aware that i can get better rates elsewhere, however i’d prefer to get the loan established first and then change later if i need to/can.

    Cheers,

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