Hi
Ive just put an offer on a house and its been accepted and its going through the convayancer and inspections right now. My financial institution will be telling me the good/bad news any day this week. i was just after some advice on how to structure the loan? Im a first home buyer, so i plan to live in the house while i renovate but as soon as i can i want to use the equity to purchase another property as an IP. The purchase price is 280k. Im borrowing 265k. I can afford to go PO or P+I. At the moment im going Intrest only with a 100% offset account, the money i save on repayments ill put into the offset account, then in a few years time i can use equity and this account to use as a deposit on another property at which case ill turn the PPOR into IP and switch to P+I. Im after advice, or links to other forums as im sure this question has been asked many times thank youHi Jake
You mention you are waiting to hear from your lender this week whether your application has been successful.
I hope for your sake it is and that you have told your lender you want to go IO with 100% offset.
Reason being at a 95% lvr any variation to the loan will require another credit search and too many of these will fry your credit score.
Really your Broker should had the structure all sorted out for you prior to lodging the application.
You also need to make sure your lender doesnt have a problem with you renovating the property and then trying to access the equity as i can think of many a lender that wont be too keen on such a strategy and may require minimum timeframe.
Other issues may come with the fact that the lender doesnt want to redo a valuation in such a short period of time.
As i say without hard data hard to say whether the structure you have set up is right or wrong.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Jake
Congrats on your first IP.
The interest only with offset is a fantastic structure for what you're setting out to achieve.
My only pointer is that if your second property is also going to become an IP, then you could look at using the funds in the offset to pay down some of the loan from IP 1 and then reborrow it to fund the deposit/costs on IP 2. That way, you've kept all you debt deductible.
However, it's an option to consider down the track. Most important thing at the moment is getting approval on the first one.
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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