Hi
I'm just curious to know if we were to take a line of credit over our PPOR for say $250K with the sole purpose of using this LOC for deposits of 20% plus costs and then borrowing the balance of 80% against the investment property.
When it comes to providing details for our serviceability of the new 80% investment loan, does the new lender look at the full LOC of $250K or only the percentage of that LOC that you have used ie: $40K.
I'm just curious because I know they look at a credit card's limit as a full liability, even if it is always paid up to date on time.
If they did look at the full LOC wouldn't this then hurt our ability to lend 80% on further investment properties?
Just trying to work out the best way to go forward. Appreciate any advice given.
Cheers
The approved limit is taken into consideration even if it is only partially drawn.
Richard Taylor | Australia's leading private lender
Thanks for that…I was afraid that might be the case. Appreciate your response.
To add to Richard's comments, the idea I suppose is that there's nothing to stop you from pulling out all your funds in the LOC tomorrow, in which case you would have a hard debt of $250k which must be taken into account.
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