hi guys,
me and the missus are looking to buy an investment property soon (next 3-10 months) ok, now i have a job atm (whilst at uni paying $400p/w as does she, which we have both been in for 11 months.
i have seen another job, yes on SEEK, that is higher paying, in the banking & finance area, which is wwhat im studying and has career oportunities,my question is, will a bank see as beeing in a job for under 6 months as a negative, given that a 10-20% deposit will be laid down, roughly on a 180-220k investment
cheers
please, all the help i can get would be appreciated.Hi there
All depends on the rest of the dal but probably No.
Remember if you have a current non deductible loan on your PPOR you dont want to be putting 10-20% down on an IP as the IP interest is deductible whilst the home loan interest is not.
Would be better of structuring the loan properly and borrowing 100% plus costs.
Richard Taylor | Australia's leading private lender
current we both live with our parents… so we dont have a PPOR just looking for an IP,
would you be able to expand though on what you mean in regard to interest being non-deductible?
Interest charged on a principal place of residence cannot be offset against your taxable income so is considered non deductible.
Interest charged on an investment property can be offset against your taxable income.
Assume that you earn $50,000 Gross per annum and the rent received on the IP is $15,000 but the interest charged on the same property is $20,000.
You would add the $15,000 rent onto your Gross income and then deduct the $20,000 of interest charged and your taxable income would be amended accordingly. of course then you have the non cash items you can also claim such as Depreciation and Building Write off.
If you do not have a PPOR I would recommend still borrowing maybe 90% of the purchase price, paying some LMI and retain the 10% odd in an offset account. The net interest effect will be the same but the flexibility being that you can access the savings account and use this as deposit for a PPOR yet still claim the full loan balnce on the IP.
A further alternative would be to buy the property and classify it as your PPOR, claim the increased Grant (will take you a long time to save up a mnimum of $14,000) and then after the qualifying period rent the property out.
Hence my suggestion about structuring the loan correctly as you need flexibility in your loan as circumstances change.
Richard Taylor | Australia's leading private lender
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