Equity ? from newbie

Viewing 4 posts - 1 through 4 (of 4 total)

Chris73
Participant
@chris73
Join Date: 2004
Post Count: 4
October 25, 2004 - 10:26 am
Hello all ,
Here’s my situation , I have a house valued at 380k owe 170k is 2 years old ,i earn 80k and my wife 20k.
I want to buy another propery to live in (closer to work ) and rent my current property out . It is obviously better to own as much of my primary residence as possible in relation to my rental as i understand it . Is there a way of re financing my equity into my new residence ? Would a line of credit set up give me the flexibilty to do this ?
Thanks Guys
Mortgage Hunter
Participant
@mortgage-hunter
Join Date: 2003
Post Count: 3,781
October 25, 2004 - 10:49 am
Well of course it can be done.
But…..
Not for tax deductibility. Unfortunately unless the ownership of the house changes then the tax deductibility of the debt doesn’t.
You can take your current mortgage up to 100% to buy a new home but only the first $170K will be deductible as it was used to buy what is now an IP.
Hope this makes sense,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985
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Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
October 25, 2004 - 11:09 am
You could sell tax free to your trust, this would release your money. Use this money to buy your new home, and the trust could borrow to buy the house from you making the trust loan much larger than your new home loan. You will have to pay stamp duty tho.
Another way, if owned jointly with spouse, sell you share or buy your spouses share. To do this you would increase borrowings and release funds like above, but not as much. But, there may be ways of avoiding stamp duty on this altogether.
Terryw
Discover Home Loans
North Sydney
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Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Mobile Mortgage
Member
@mobile-mortgage
Join Date: 2003
Post Count: 913
October 25, 2004 - 12:17 pm
Hi Chris
If your long term plans involve acquiring multiple investments, then you may want to consider separate loans, with the deposit on the new PPR raised from a portion of the equity released from the IP,
The balance of funds from the release of equity on the IP could then be placed in an offset linked to the PPR loan until required for deposits on future investments.
Regards
Steven
Mortgage Broker
[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIA
PLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.