Extra payments?

Viewing 6 posts - 1 through 6 (of 6 total)

kasd
Member
@kasd
Join Date: 2011
Post Count: 8
June 4, 2011 - 8:15 am
Hi all,
At the moment we have a PPOR on an interest only loan. Our payments are $3,400.00 per month but we are putting down $4,000.00 & are still able to carry out works on the home to Finnish the renovation.
So my question is, what would be the best thing for us to do with the extra over?
Pit it on the loan
Save it
Or use the funds to complete the Reno earlier.
We are thinking about renting the place out, (well I am anyway) & am working towards buying another place once the Reno is done.
Jamie Moore
Participant
@jamie-m
Join Date: 2010
Post Count: 5,069
June 4, 2011 - 8:45 am
Personally, I’d look to get the reno wrapped up. Once that’s done – you can have the property revalued. If the renovations added value, you could tap into this equity and use it towards purchasing the next property.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
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ALF1
Participant
@alf1
Join Date: 2011
Post Count: 237
June 4, 2011 - 10:45 am
Good advice from Jamie and I concur. Finish the reno and then assess your situation.
kasd
Member
@kasd
Join Date: 2011
Post Count: 8
June 4, 2011 - 12:00 pm
Thanks gents
Catalyst
Participant
@catalyst
Join Date: 2008
Post Count: 1,404
June 4, 2011 - 11:49 pm
Don't put extra money on the loan if you are going to rent it out. This will reduce your claimable interest. You could put it in an offset account.
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
June 6, 2011 - 1:32 am
Yeah, i would go for the offset for now. Re assess the situation later.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au