Hi all
New to investing and just wanted to put my situation out there and see what comments i get back!!! My family do not invest in property so learning the ropes ourselves…Bought 2002 small house – $140,000 bracken ridge renovated and sold in 2007 for $325000 to by our dream family home in Taigum for $379,000.
After having 2 kids, maternity leave etc and lots of other stuff goin going last year we were sitting at our Taigum home now valued for $529,000 and $243,000 on homeloan.
We have just used our equity and have bought a townhouse in Eagleby for $319,000 – have this with a different bank and paid deposit and costs on an investment loan. We have a $25,000 safety net incorporated in this. We have an offset linked up with our PPOR and use our credit card for living expenses which keeps all pay in there. OUR PPOR is variable IO and our invetsment loan is IO variable.
Just a quick question – i am one of those people that like to see my mortgage decreasing and becuase I am not thinking of never selling our family dream home we now live in I am thinking of putting in more each month to see the figures drop…just transferring it every month. What do you think? I am hoping to pay my mortage on PPOR off a lot quicker. i am also working part time as a teacher and hoping after finishing paying chilccare and going back to work full time in the next couple of years will be soooo much better for our cashflow!!! But by living within our means I don't think we are doing to bad…
Do you think out situation is OK for a 30yr old???
Hi Tambam
It is all a personal opinion. Never is a long time and too late once you have paid the loan down only to realise you wouldnt mind renting it out after all.
Why not keep things as they are and buy another IP.
You can place all of your funds in the offset account always pay down the debt through an internet banking transfer if you really wanted to see the balance reduce. Just remember not to use a redraw on the loan for investment.
Richard Taylor | Australia's leading private lender
what do you mean by " remember not to use a redraw on the loan for investment" – thanks for the other advice much appreciated! Think i might try surviving our first year with a rental before looking at the second!!! haha maybe in another 5 years or so.
Interest on redrawn funds on a PPOR is not deductible because the original use of the funds was not for investment.
Richard Taylor | Australia's leading private lender
Hi RIchard and Tamban
I think your wording there is a bit off and may confuse.
Tax deductibility depends on what the funds borrowed are used for. Redraw = borrow. So if someone redraws money and uses that money to buy an investment the interest on that portion should be deductible. It doesn't matter that the origin loan was used for an owner occupied home.
But this is not ideal because you will have one big loan with mixed purpose – part investment part personal.
So instead of using redraw you should set up another split.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Apologies Terry yes the wording was not the best.
Been a long day.
Richard Taylor | Australia's leading private lender
I forgive you Richard!
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
first time investers who put $1000.00 down as bond on a property that at the last min didn't tick all the right boxes.
Had fiance approved and received paperwork for signing as well as settlement papers but have formally contacted those concerened that we will not be signing anything and will not proceed with the deal.as things did not appear right to us.
we have to pay half the settlement fee of $700.00 but have been notifed that the developer intends to keep the $1000.00 bond because of admim fees associated with dealing with the settlement agent and because we were told the deal was now unconditional however we have signed nothing and sent nothing in.
we beleive we are intitle to our bond back and buy the way the bond is being held by a soliciters trust.
we welcome your feed back.
With 14,000 posts between the two of you, i'd be surprised if anyone here wouldn't forgive any phraseological errors on either of your parts
…not that you would ever make any Terry
Jacko,
i think you would have been better to start your own post inorder to receive replies specific to your particular situation. i unfortunately do not know the answer to your question, put your own post with a suitable topic and people with knowledge in that area will be able to respond to you.
Cheers and good luck
Sonya
jacko44 wrote:first time investers who put $1000.00 down as bond on a property that at the last min didn't tick all the right boxes.
Had fiance approved and received paperwork for signing as well as settlement papers but have formally contacted those concerened that we will not be signing anything and will not proceed with the deal.as things did not appear right to us.
we have to pay half the settlement fee of $700.00 but have been notifed that the developer intends to keep the $1000.00 bond because of admim fees associated with dealing with the settlement agent and because we were told the deal was now unconditional however we have signed nothing and sent nothing in.
we beleive we are intitle to our bond back and buy the way the bond is being held by a soliciters trust.
we welcome your feed back.
Jack – you must have signed a contract for it to have gone that far. If you did you are very lucky not to have been sued for the full 10% and possibly more.
Even if you pull out within the cooling off period you usually lose that holding deposit.
And you will have to pay for the legal work done so far.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
have had a successfull outcome to my bond with a full refund and a reduction in my settelement fee so i am pleased with the result.
jacko,
had you already signed the contract of sale?
Cheers,
YIthe matter has been resolved in our favour and therefore i require no further comment on this issue thanks jacko.ps always trust your gut feelings. cheer's.
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