hi everyone
long time lurker,can i pick your brains?
can i make this posible and how?
in feb04 purchased ip for 215k,settle costs approx 15k,borrowed 320k,rocket home loan with offset at 6.67%principal & interest.
rolled outstanding loans into the one.everything x-coll
breakdown of loans as followed.new ip 230k
ppor 30k
bad business loan 40kcurrently have income from rent $210,$260 and $120 from another ip that i own.bank vals at feb 04 were new ip 230k,ppor 310k and other ip 130k.
currently owe bank 315K and have funds available of 60K.currently paying $2059 pcm on loan.hopefully in the next 4 months can save another 15k. qustion is i would like to buy another ip at end of 04 for approx 200k,catch is that i will be taking holidays in april for approx 2 months and then continue travelling around Australia picking up work as we go ,we will do this to chrismas time,we then plan on moving back in to our ppor.any ideas?cheers
chevHi Chev,
I don’t see any problems providing there are no issues with servicing further debt,
I’m concerned you have the PPR loan tied in with the investment loans, and the fact that you could be getting a better rate based on your current loan amount.
Be careful how you structure the finance for the next purchase, try to avoid x-coll.Good Luck.Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIAPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
Mobile mortgage,thanks for your reply ,just re-read my thread,PPOR should read 310k not 30k,sorry about that.any ideas on how to structure the loan?
regards
chevHi Chev,
Base on your revised figures your debt is $580K on a portfolio valued at only $540K??“breakdown of loans as followed.new ip 230k
ppor 310k
bad business loan 40kâ€I will assume the 2Nd IP valued at $130K is also included as security over the loan,
Working on your revised figures your total debt would be $580K? Secured over a $670K portfolio, your LVR is approximately 86%.
IP Owe $230K – Val $230K
PPR Owe $310K – Val $310K
Business loan $40K
Other IP Owe? – Val $130K (I assume this property was previously unencumbered?)If my figures are correct, you don’t have a lot of available equity,
To uncross may be difficult but not impossible, x-coll is not terminal but it can cause problems and should be avoided if possible, at the moment your deductible debt (investment) is tied to your non-deductible debt (PPR) your offset is linked to the whole loan; a split with the offset attached to the non-deductible portion would be more beneficial,
Either way I suggest you keep finance on the next purchase separate, an 80/20 or 90/10 loan etc will help you achieve this.Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIAPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
I agree that they way you have done it is not good. mixing business loans and non business – how do you portion the interest at tax time. You would want your PPOR loan to be PI and you IP loan to be IO to maximise your tax deduction. If you have spare cash, this should be parked in a 100% offset account agianst your home loan. Then if you want to use the cash for a new IP, put it into your home loan account, and borrow the money again -either as a LOC or separate IO loan so the interest will be tax deductible.
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
mortgage broker/terry
sorry for the confusion
let me start again
total money borrowed 320k
only owe 30k on ppor val 310k
other ip val at 130k own outright
bad business debt owe 40k
owe 230k on ip val at 230k
the other 20k is sitting in the offset which forms part of the 60k available.
hope this makes more sense.
all loans are x-coll
the reason for having the loans in one is because for the last 2 years i have been travelling Australia and i intend to do this for another 18 months before we return back to our ppor,it has been tenated for this whole period and we treat as another ip till we return.cheers
CHEVHi Chev,
You’re in a much better position today than you were yesterday [biggrin]
If at all possible I would look at keeping the next loan separate from your current structure, perhaps using part of the funds in the offset for the deposit on an 80/20 type loan,Deductible debt on the PPR may not be an issue until you move back in to the property, cheers.
Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIAPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
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