Hi All,
I have a PPOR property and i don't believe with the current market I have any substantial equity on the PPOR. However I have around 40k in my redraw. I have an interest only loan with offset account in my PPOR
Scenario
Investment loan (House & Land) $ 416k
Deposit Paid – $13200
Current Deposit saved $ 40k.What would be the best structure I should look at for Investment Loan which would make it easier to diffrentiate with tax deductibe loan and non tax deductible loan. I am new to this and would really appreciate anyone's help / advise.
Thanking all in advance
Regards,Melvin.
Hi Melvin
What is the current value of your PPOR and what is the current loan amount?
The scenario above – is that the IP you are intending to purchase?
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]
Hi Melvin
Ok what i would suggest is get the lender to cancel the redraw on your PPOR and then take out a new loan split for the same $40K.
This is to be an interest only loan and will have a separate account number and be easy to identify the interest.You can then use these funds as deposit for the new investment property.
After all of this however just make sure you dont cross collateralise the loans.
If you are using a separate lender there will be no issues.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks guys,
Jamie,
Current Value of the PPOR would be about 450k, But I ahve a loan limit of about 400k. balance on the loan is about 360k. The sceario above is for an IP.
Qlds007,
If I split the account and deposit the 40k in a new account is gr8 idea. However as I have an offset account, by me depositing funds in the future in the offset account, would that reduce interest in the new IP account just created ? or would it only offset the PPOR loan account ?
Thanks guys, much appreciated.
Regards,
Melvin.
Anthoer question guys, whats the best way to pay bills on an investment property ? WOuld paying bills from Offset account be the correct way, or deposit funds in the split account created and then pay any bills on an IP ?
Regards,
Melvin
If you have non deductible debt on your PPOR then you dont want an offset account on your IP.
Not sure which lender you are going thru but i wouldnt be paying for something i dont need.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks Richard,
I do not have a non deductible debt on PPOR. I am hoping to go through NAB.
With what I ahve understood.
I will split the 40k to use as deposit to the new IP.
So the future state will be
As normal – PPOR has offset
IP has only Investment deducible loan.In any which ways, what would be the best option to pay bills on IP ? Can I pay bills directly through my savings ? or should it go through the split account and get paid from there /
Thanks for your help.
Regards,
Melvin.
Hi Melvin
Sorry but i hate to say i think you are totally confused and will come a real cropper if you are not careful .
If you use the redraw the interest will not be Tax deductible.
The loans will be cross collateralised and you definately dont want this.
I am just off to take my 17 year olds soccer training so have limited time but if you shoot an email i will show you how to set it up correctly so that the loans are fully Tax deductible and the offset account saves you money.
By the way from what you have mentioned I would not be using NAB retail.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Melvin
I'd just take up Richard up on his offer above. Get a pro to sort it out for you – that way, you don't need to worry about the structure.
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]
Richard,
Thanks mate, I ahve sent you an email, would greatly appreciate your help on this one.
Regards,
Melv.
Hi Melvin
Yes got it an replied.
Hope it makes sense if not give us a call.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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