All Topics / Finance / Ideal loan structure

Viewing 6 posts - 1 through 6 (of 6 total)
  • Profile photo of Roy4Roy4
    Member
    @roy4
    Join Date: 2005
    Post Count: 4
    July 23, 2012 - 5:12 am

    Hi
    I am a novice property investor. Looking for some general advice.
    Current portfolio:
    IP1 Value 650K
    IP2 Value 550K
    Investment loan 751K for both properties interest only
    PPOR Value 420K (no loan).

    Looking to set up an offset loan (?) interest only that would allow
    (i) extension to PPOR (need 150K)
    (ii) deposits to buy further IPs

    Any advice appreciated.

    regards Roy

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    July 23, 2012 - 5:43 am

    Hi Roy

    I would uncross collaterise both IP's now.

    I'd leave the PPOR unencumbered for the time being and tap into equity against one of the IPs which would be used to fund the deposit/costs on future IP purchases.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Roy4Roy4
    Member
    @roy4
    Join Date: 2005
    Post Count: 4
    July 23, 2012 - 5:52 am

    Thanks for your comments Jamie.
    I fell victim to cross collateralisation due to lack of knowledge.
    Only learned about it after it had been done. Didn’t realise that the lender
    had set it up to ensure a safer/stronger control over my assets.

    How would you suggest i obtain the funds for extension/renovation of PPOR?
    I thought an offset loan would be best as plan to live in house for a few years, then
    upgrade to a larger home and retain current PPOR as IP3?
    regards Roy

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    July 23, 2012 - 6:13 am

    Roy yes hate to say the old lender trick of forgetting to tell you that more than 1 property is being used as security for the loan.

    God it annoys me that they can get away with it.

    I would probably start from scratch and unravel the existing ties with your lender.

    If you are possibly looking to retain your current PPOR as a potential IP it is probably a good idea to see what options you have here for a possible transfer of ownership at the same time.

    Probably a good time to reassess your position and plan going forward before the X ing of your loans causes you future problems.

    Little more information would be required to provide a more structured reponse.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of Roy4Roy4
    Member
    @roy4
    Join Date: 2005
    Post Count: 4
    July 24, 2012 - 3:22 am

    Thanks for your comments Richard.
    I will certainly look at uncrossing the 2 IPs, as this should allow access to some equity for investment in further IPs?
    Would it be worthwhile having an offset loan on the PPOR to use for renovations and deposit for future PPOR?
    regards
    Roy

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    July 24, 2012 - 4:08 am

    Roy wouldnt mix the 2 together but could certainly set up a separate sub loan account on your PPOR and use these funds for future PPOR deposit.

    As i say it depends on the current ownership as to whether a Transfer of Ownership is a viable option.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

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