Hi
First time for this so please excuse if I break any unwritten rules that I don’t know about or I ask really dumb questions. We are new to property investing.
Our situation is we own our house outrght and have no debits whatsoever, but we have recently sold our business and no longer have a source of income, I should add we have no ntention of working again. We have approx $100K cash and can access approx $600K as a line of credit on our house. The question is do we sell and downsize and free up $400-500k to use to fund our property invetments or do we stay put and use the line of credit.
Any suggestions/ideas woud be appreciated.
thanks
Nikmar
Hi Marnikp,
I recommend you have a good discussion with a good broker they will be able to canvas a few options for you.
Unless you are specifically ‘downsizing’ for lifestyle and/or personal reasons I would consider the line of credit/equity loan option with lo doc/no doc loan.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
These sorts of decisions really need to be made for yourselves. As a broker I find this sort of questions weighs heavily on my mind and is one that you really shoudn’t ask someone to make for you – if they easily advise you then perhaps they are a little flippant and not to be trusted with your livelihood?
A NODOC would be the best – this would free up 65% of the value of all securities and shouldn’t be expensive. My NODOC is 6.85%.
I am sorry but this is really your call – once you made it then a broker can help a lot!
All the best,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985NODOC Loan – 65% Loan – No questions asked!
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi Guys
Thanks for your comments.
I am not asking for someone to tell me what to do, but rather as a strategy which is the best option to use so that we can grow our property investing bsiness.
We have no problem with downsizing if it makes good business sense to do so.
Our aim, should we sell, woul be to use our free cash to fund deposits ie 20-30%, stamp duty etc and then borrow the rest against each individual property. This would then save us paying interest on the closing costs and reduce our intrest components.
regards
nikmar
I would see no real benefit in selling. sure, you may free up a little bit extra, but you have to live somewhere and your home is your only CGT free asset.
If you want to buy property, just go for No doc or Low docs at 80% LVR. With that much cash and equity, you should be able to buy $2.8 mil worth of property (in theory anyway). That should be enough to get you going, and then by the time you have finished pruchasing, values would have increased, so you can start again.
Have a look at trusts, and to stretch your borrowing capacity much furhter just have one trustee. ie have a trust for the wife and one for the husband. This is also safer for asset protection.
A good strategy would be to buy your ideal dream home (in personal name) – the one you would like to retire in (within reason of course). Then rent this one out for 5 to 10 years. Then sell your home – tax free, pay the money off the mortgage and then borrw to invest.
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
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