Hello,
I was hoping someone can shed some light on buying a property as a first home lender VS increasing equity and repayments in my partners property and going from there.
The situation is that my partner purchased a unit about a year ago for $320 000 which now only has a loan balance of $250 000, which we both have been living in for 6 months. I have just been given pre-approval for $320 000, with a $35 000 deposit saved. The question is, are we better to put this into my partners loan and increase repayments (and equity) on this before using this equity to purchase an investment property. Or is it pretty much the same if I go through another lender and just buy a separate unit. I assume there could be some tax advantages, and less risk in proceding with plan A.I thought the name of the game was to build your equity. i could be wrong thought I’m still fairly new to this. We are increasing the loan on our house to buy an investment property, there does not appear to be much advantage in doing it the other way.
Hi both
Firstly welcome to the forum and I hope you enjoy your time with us.
In regards to Vis's question.
Are you both living in the existing property as a PPOR or is it an investment property.
If it is a PPOR then certainly dont want to be using cash for a deposit.
If not then much of a muchness.
Usually lenders have no idea how to structure your loan to be Tax effective and say things like "use the redraw" .
Richard Taylor | Australia's leading private lender
Thanks for your advice:
In terms of PPOR, I believe it would be, we have both lived in it for 6 Months and my partner recieved the FHOG. I though if I were to buy one that the new one would become PPOR and we can turn the existing one into the investment property and maybe extend the loan and make it cash flow positive so it can look after itself – or does this take time ?
So I am gathering it would be better to build equity on existing one and borrow 100% against equity for a tax saving on the interest being paid on the next one we buy.Hi again Vis
I think you might be getting a little confused on how best to structure the deal and what you can and cant claim.
Regretfully if you intend to purchase the next property in your sole name regretfully you probably wont qualify for the FHOG as your partner has already received it. In saying this playing around with the equity numbers may save you a little bit when it comes to LMI but without all of the information it is difficult to comment.
Richard Taylor | Australia's leading private lender
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