All Topics / Finance / I am drowning in Accounts

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  • Profile photo of DGEDGE
    Member
    @dge
    Join Date: 2008
    Post Count: 3
    March 1, 2010 - 2:01 pm

    Hi Everyone

    Long time lurker, first time poster. I am still not convinced our MB is doing the right thing for me. I know you guys get paid on initial setup and trailing (Not sure of correct term) which is fine I do not begrudge anyone making a dollar, as long as your intentions are good and you do not try to take advantage of people. Enough rambling.

    This is my current loan setup, with amounts owing and equity available etc…


    Currently

                                                                 (Owe)                    (Value)

    Personal LOC                                    $30,000                    

    Home Loan (PPOR) (P&I)                $296,000             $565,000

     

    Credit Card (Paid Monthly)           $5,000

    Car LOC (Work Allowance)            $49,500                                            (Vehicle for work purposes)                 

    Inv LOC                                               $18,000

    Inv Loan (1)  (I/O)                            $103,000              $135,000

    Inv Loan (2)                                       

     

    Balances                                           $501,500              $700,000 ?

     

    LVR                                                        71.64%


    Personal LOC is at Max, Inv LOC is at Max, I just feel the Personal LOC is eating up extra, I know it is not good to add to PPOR mortgage but in this case I feel it is better. We will then run that purely from what is in there, no credit.

    I am wanting to get another IP and just want to check is there a better or another way to look at this. If anyone is happy to give some suggestions I would like to question the MB and see what the response may be.

    The income is roughly this below –
    Inv Prop 1 Rent = $8,060 I have not had a Tax year yet
    Car Allowance   = $19,000 Tax free for vehicle (TWHV)
    Income combined = $90,000 (Approx Gross)

    So any ideas I want to get this party started !!!

    Thanks
    Dale

    Edit – Sorry about the format not sure what is going on here.

    Profile photo of BankerBanker
    Participant
    @banker
    Join Date: 2010
    Post Count: 371
    March 2, 2010 - 2:32 pm

    Is this one lender or two?
    Can you provide interest rates?

    It’s hard to say if you should restructure. If cashflow is tight make sure rates are as low as possible and switch peronal debt to IO only (keep in mind you can still reduce an IO loan if you want by increasing your repayment).

    You could always role the LOCs into the loans – might be cheapr and easier to manage from a admin point of view.

    From what you’ve said you not should be paying more than 6.0% ( excluding today’s rate rise).

    Profile photo of DGEDGE
    Member
    @dge
    Join Date: 2008
    Post Count: 3
    March 2, 2010 - 3:19 pm

    Thanks Banker, I suppose I am just trying to get things in order, I wish to go and get another Inv property, hence I felt it worth while to get a few thoughts from people who do it a lot more than me.

    Rates as requested  –

    Personal LOC = 6.01%
    PPOR = 6.11%
    Car LOC 5.86% ?
    Inv LOC 6.11%
    Inv Loan (1) 6.01%

    Interesting variation of rates. I have no idea why the Car LOC is so different.
    As for the bank Yes that Bank. All of it.
    Cash flow is OK, could be better :) I am questioning as some of these then have the additional yearly charges to be added.

    Curious to see what you and others may think.

    Thanks again.

    Profile photo of traceyimbtraceyimb
    Participant
    @traceyimb
    Join Date: 2003
    Post Count: 82
    March 8, 2010 - 11:48 am

    Hi DGE,

    It is possible to consolidate the LOC into the home loan.  You may be able to restructure this within the same lender and reduce the interest rates across all accounts.  Interest rates have just increased though by 0.25% with most lenders so the rates will be higher than these you have listed. If you did this direct with a bank you may find you are cross-collateralised and you could change each property to stand alone security at the same time.  This would give you more flexibility to access equity in either property for further investment  If you are paying monthly fees on each of these accounts it could save you money on fees too.  I would suggest you get a broker to do this for you.

    There is a property worksheet available that can be helpful if you have several properties or loans.  Go to http://www.propertyinvestornetwork.com.au and download the property worksheet.

    Cheers,
    Tracey

    Profile photo of DGEDGE
    Member
    @dge
    Join Date: 2008
    Post Count: 3
    March 9, 2010 - 3:45 pm

    Hi Tracey

    Thanks for your comments, I am investigating a few areas you mentioned. Yes I do want to consolidate the Personal LOC with the current PPOR mortgage.

    I am also looking at the details to see if it is indeed cross collateralised or not.

    This has been setup by a broker so I am hopping it looks OK most have not screamed it is all wrong so that is OK for me. I do need to get a handle on a few things and then move forward again.

    Thanks for the comments.

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