Unless you want to cross coll the properties (not good) you would need one LOC per property.
LOCs generally have a higher rate than IO loans.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terryw wrote:Unless you want to cross coll the properties (not good) you would need one LOC per property.LOCs generally have a higher rate than IO loans.
Ok thanks. Now supposing Bank A gives me a lower rate for its LOC than Bank B. Can I transfer the full amount of the LOC from Bank A into the bank B LOC in order to save on the bank B interest (both being used for future IP deposits) if I am not utilising the total of both? Or do I run into tax issues shunting money around like that?
You would be paying one loan out with another. It is possible to do and to maintain deductibility, but you need to be careful
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
on a similar vein, supposing I go and rack up $500 worth of stuff at Bunnings to help renovate an IP (again no personal expenses) using my credit card, can I then pay off that portion of my monthly credit card bill using my dedicated investment LOC, and the remainder using my normal savings account and then claim the interest generated by using the LOC?
It depends if you pay the full balance off every month. If you do then I think you could borrow from the LOC and pay off the credit card loan. You would be just refinancing debt. Should be ok as the money goes straight from one loan to the other.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terryw wrote:It depends if you pay the full balance off every month. If you do then I think you could borrow from the LOC and pay off the credit card loan. You would be just refinancing debt. Should be ok as the money goes straight from one loan to the other.Thanks. That's what I figured. I'll leave you alone now. Appreciate your input again.
Shape wrote:LOC is easier to get approval and less hassle…but it’s def not the best structure in the long term + less flexabililty and costly.
I would suggest a standard equity release with a standard split loan…Regards
MichaelHi Michael,
many thanks for sharing the knowledge to all of us here.
surprisingly not many finance broker that I am dealing with now telling me to set it up like you told us to do (using standard equity release loan)
You must be logged in to reply to this topic. If you don't have an account, you can register here.
