Just new on here. Fantastic site. I have just finished reading Steve’s new book an am getting really excited about investing.
Would line of credit be a good way to start off?? Seems very flexible, the thing i’m not sure on though is is it better to have one loan per house and keep it all separate or with line of credit does it all go into one???? (if you know what i mean!)
Also any ideas on how to get my partner into being as excited as i am… makes things a little difficult so any positive ideas you may have love to hear about them.[biggrin]
traceycast
Hi Tracey
Must admit structuring your IP loans is probably one of the most important parts of setting up your Investment Portfolio.
My preference is to bolt a LOC to your PPOR and then use this to draw down for deposits and costs and have the IP loans stand alone on an interest only basis.
In saying this there are a few provisos:
1) The rate of interest on the LOC is not more than normal and you are not paying for the flexibility.
2) There is no charge for the funds sitting their dormant.
3) You have equity and are able to go to 80% LVR on your Investment Properties. if this not the case 90/95% maybe necessary and then you will incur LMI.
4) Overal serviceability is imprtant as there is no point in setting up a fancy structure and then finding you havent the income to service the proposed loan and would have done things differently had you known.I guess the main thing is to get a mortgage broker to go over your figures and make some suggestions on structure, lenders and the rates of interest as well as what you want or require now and in the future. With the availability of Pro Packages these days a preferable rate can be negotiated as well as a waiving on the application costs and other services.
Richard Taylor
Residential & Commercial Finance Broker
**Lodoc Commercial loans from 7.19%**
Licensed Financial Planner
http://www.yourstatefinance.com
[email protected]
Ph: 07-3720 1888Richard Taylor | Australia's leading private lender
Hi Richard
Thanks for your advice. It certainly gives me something to think about and decide which way to go.
I have another question re:- investing Is it better to pay a small deposit or larger to have more equity straight away in the IP. This seems to differ from person to person.
Any ideas on this would be greatly appreciated.
Tracey
Tracey
It all depends on a variety of factors and your own position regarding any non tax deductible debt.
If you want to take this off the forum and give me some further details i would be happy to point you in the right direction.
Richard Taylor
Residential & Commercial Finance Broker
**Lodoc Commercial loans from 7.19%**
Licensed Financial Planner
http://www.yourstatefinance.com
[email protected]
Ph: 07-3720 1888Richard Taylor | Australia's leading private lender
You probably don’t need an LOC.
If you have non- deductible debt & intend to access the equity in your PPR for investment purpose, then you should consider a split loan with a 100% offset account attached.
E.g.
Split One. Balance remaining on current home loan, P&I repayments with linked 100% offset account.Split 2: Investment loan. Interest Only repayments, Place these funds into the 100% offset account linked to your home loan (non deductible debt)
Redraw the funds as required from the 100% offset account, i.e. deposit on next investment loan etc. Cheers.
Regards
Steven
Mortgage BrokerMobile Mortgage Market
Ph: 0402 483 216
[email protected]
http://www.mobilemortgagemarket.com.auPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
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