I am looking for some advice or options on structuring a loan.
Our PPOR is currently being rented and we ourselves are renting due to interstate relocation. This property has a mortgage of less than $80K and is valued circa $500K and is currently positively geared.
Looking at purchasing a property for $500K+ (for us to live in) by using equity in existing property.
Am considering moving existing property to Interest only and purchasing new property also on Interest only as we need to consider serviceability until we decide if we want to sell existing property. I am conservative by nature I’m afraid! We have worked hard at reducing mortgage substantially so Interest only is all new to me.
Is there any other options we should consider? What are the major risks associated with this structure?Appreciate any advice…
Don’t be scared of interest only if it allows you to achieve what you want.
If you do wish to get ahead on any loan then do so in an offset account attached to the new PPOR – this will help if this home becomes an IP down the track – you can draw the funds from the offset and the loan is now deductible.
Shame you werent shown this earlier with the other place.
All the best,
Simon Macks
Residential and Commercial Finance Broker[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
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