All Topics / Finance / IP Loan Structure

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  • Profile photo of glsmithglsmith
    Member
    @glsmith
    Join Date: 2010
    Post Count: 2
    February 13, 2011 - 3:18 pm

    Hi,

    I'm currently living OS and have savings of around 90,000aud of
    equivalent local currency.

    Most of the cash is in my local currency (HKD), so I'm hesitant to buy AUD
    at the moment until it drops a little.
    (exchange rate is at its highest).

    I would like to purchase another IP, hopefully in country victoria,
    hopefully this won't be more than 200,000.

    I have 33,000 USD in an investment which I'm willing to cash in.

    I own a small flat in inner city Melbourne(rented).

    I have a mortgage on a property in QLD.(also rented, this will be
    my ppor in about 2-3years).
    The qld property I think has equity of around 130,000aud, with app
    360,000 owing.

    I plan to spend about 100,000(renovations)on this property when I return home.

    What should my loan structure be?  Should I just get Interest only,
    or a P/I loan. I would hopefully like to have it positively geared, or
    where I don't have to contribute too much of my salary.

    I'm thinking about HSBC for loan and see whether I could use
    a HKD account to offset, if possible.
    Regards

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    February 13, 2011 - 8:49 pm
    glsmith wrote:
    What should my loan structure be?  Should I just get Interest only,
    or a P/I loan.

    Hi Glsmith

    Welcome to the forum.

    I’d set it up as IO – particularly if you have another PPOR you’re planning to move into later on. As a general rule, it’s ideal to have IO for your IPs – and either IO with an offset on your PPOR or P&I.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of HomeLoanExpertsHomeLoanExperts
    Participant
    @homeloanexperts
    Join Date: 2007
    Post Count: 43
    February 14, 2011 - 2:04 am

    If the flat in Melbourne has no loan on it then you can use the equity in that to fund this investment without the need to bring in your funds from overseas. I agree with Jamie it is likely to be best to use interest only for this new loan.

    Profile photo of glsmithglsmith
    Member
    @glsmith
    Join Date: 2010
    Post Count: 2
    February 14, 2011 - 3:53 am

    Many Thanks Gents.
    Glsmith

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099
    February 14, 2011 - 12:26 pm

    Yes def interest only for the IP- impove cash flow first then when your in a position to – reduct your loan amount later on…

    But since your living OS- yes it”s possible to borrow but not all lenders accept ex-pats ( im guessing from your post your a ex-pat?)
    So something def worth looking into before you commit your self into any contract or deal..

    And yes i would target the “international banks” as they are more flexible in these situation-

    Regards
    Michael

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

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