Hi All,
I will be refinancing my 2 IP’s soon to another financial institution. Currently I have a separate loans for each IP. The new bank that I will be going to advised to consolidate the 2 loans into 1 loan.I really didnt like that idea. I presume if I do get one loan for both IP’s I will not get the Land Title deed until the whole loan is payed off ,so it traps both IP’s until I pay off the loan.
What are your thoughts on this?
How should I structure the loans P&I or IO ( one of the properties is greater in debt than the other )
Also I beleive i should get a percentage back from LMI when i refinance.thanks in advance.
Sala
hi Sala
if at all possible maintain separate loan accounts, even with different lenders.
your bank is doing what comes naturally to some (it is some banks policy to cross collateralize in all circumstances) – that is ‘wishing to tie you up with them so you have no option (except expensive ones) but to stay with them for life.
if your existing are under 12 months since drawdown, you may be able to successfully seek some of your LMI back (say 40 -50% of premium). good luck with that, i really don’t know how successful people are with this.
cheers
brahms
If you don’t ask, the answer is NO!!
I too would think it is better to have 2 separate loans. Makes it more flexible if you want to sell or refinance, can keep them unsecuritized and easier to apportion the interest at tax time.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
The only instance where you should have one loan for both titles is to keep the total LVR under 80%. But for a refinance this is probably not relevant to you. Keep them seperate if you can… it saves time applying to the bank to have one of your titles discharged.. there are more benefits… keep it seperate. The banks probably want extra security, also they like to have your title in their hands so they can lure you back more readily.
P&I or IO is up to you and how you want to gear your investments. I do not offer advice here as I am not qualified, talk to an accountant about your immediate and future plans, it may also depend on the growth potential of the properties, what cash flow you want, and whether you want to use equity in them to invest in future.
Good luck and let me know if I can help.
Liz Wilson
Mortgage Lender
thanks for your information members
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