Hi guys Hoping all you experts can assist. With so much information overload at present, I’m not sure what to do with our current situation. I’ve been attending property and wealth building seminars and there are so many options. At present we have the following:
1. Loan 1 – PPOR paying P&I. Balance left to pay is around $360,000 and at minimum I believe we could sell the house for around $620,000
2. Loan 2 – Interest only loan for one investment property sitting at $390,000 and the property market value is around $380,000 at presentI know one problem I have is that both these loans are with the same lender and understand I need to separate these, what is the best way? Also we want to invest more in property and we know we do have a bit of equity in our PPOR and have also been advised we can service $700,000-$800,000. As I said there are so many options out there. At present we are thinking should we rent out our home and rent somewhere ourselves to claim tax benefits on our home? What is the best way to structure our loans going forward to receive the best benefits? Should we change our PROR to IO? How do we pay off our PROR quicker? I’ve read so much about offsets and LOC, but don’t have the full understanding of how to do all this. I’ve been looking into companies such as Positive Real Estate and Ironfish to help us with investing, if any of you have had experience with companies such as these your thoughts are greatly appreciated, but was hoping to structure the loans correctly myself first. In the future we are hoping to purchase land and build closer to the city, so we would like to have the cashflow in the next 2-3 years to put a decent deposit down, as I really don’t want to have a mortgage over my head for the next 30 years! I am open to whatever is going to benefit us in the long run.
Your comments/suggestions would be greatly appreciated.
Hi Chelkin
Firstly welcome to the forum and i hope you enjoy your time with us.
Unfortunately your problem and concerns are one we get asked by clients on a regular basis and probably needs some specialised advice to ensure you are not digging yourself into a deeper well than needs be.
There are a couple of things you need to do and these will depend on your current and future goals and objectives.
Certainly in my opinion you need to separate the loans and this will enable you to start working backwards.
From what you have mentioned your current PPOR may well become an IP in the future so you need tread careful in regards to the Tax persepctive and the treatment of the deductible interest. I would recommend an Interest only loan with 100% offset account.
Then you need to look a sub loan to cover the balance of the funds required to separate your IP and an equity account to access deposits for future IP's.
Obviously it is difficult to comment further without the actual numbers but you are more than welcome to drop me an email and I be happy to look over the deal for you.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Agree with Richard.
Firstly, I’d untangle your loans (at present their crossed). A decent broker should be able to assist here.
Secondly, I’d consider converting all loans to IO, with an offset account attached to the PPOR loan.
The correct structure from the start will prevent issues in the future.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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