Thanks for your replies everyone…
Unfortunately, because of hubby's brain surgery mid 2012 and subsequent loss of work thereafter, we would not be in a position to apply/refinance for another loan if they need to check our figures, etc.
Can I clarify that perhaps our best option is as Tom said::
"You will need to segregate your loans into deductible (PPOR loan which will become an investment) and non deductible (credit card, etc). The deductible loan becomes IO, the non deductible as P&I with offset account linked to this non deductible loan as well. Any excess funds to be put into the offset account."
It's easy enough to combine the 2 investment loans into one (its for the one PPoR). Just not sure how I would gain a non-deductible loan for credit card, without having to supply figures to the bank??
Hate to say any lender is going to require updated figures for any new borrowing.
Under NCCP even switching from P & I to an IO loan requires a Preliminary Assessment in order to be fully compliant.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Several of the forum's brokers have commented so far… why not get in touch with one of them and talk specifics.
Jacqui Middleton | Middleton Buyers Advocates
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Heh Jac
Looking at your handle photo reminds me of a property I looked at in the UK last week.
Was around 21 Sq M and i think it was marketed as a 2 bedroom house lol.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Personally what you should be considering is high growth properties. However negative gearing is a benefit however the deal needs to stand on its own.
The way to look at capital growth is like this. If you invest $400,000 and are intending to keep for 20 years then look at one at 5% and the other a 10% capital growth. The difference over 20 years works out at around $80,000 per year for the full 20 years. Clearly you are far better to lok at something with a closer to 10% capital growth than something with 5 or less
Nigel Kibel | Property Know How
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you also need to factor in the family office and centre link. They have a wonderful unfair system where they deem loss as income for family payments and centrelink payments.
Saw a 1 bed about that size advertised for 199k in a nice Brisbane suburb recently, creative use of space and it still had a shared laundry, 2 beds in 24m2 sounds a little tardis like!
Andrew_A wrote:Saw a 1 bed about that size advertised for 199k in a nice Brisbane suburb recently, creative use of space and it still had a shared laundry, 2 beds in 24m2 sounds a little tardis like!Wow that's tiny.
When I lived in London many years back, the landlord maxed out the living space by knocking out the toilet upstairs and converting it into a bedroom that would make most prison cells looks like luxury. All for an extra 40 quid a week.
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]
Your decision to NG or PG needs to framed with your disposable AND taxable income in mind.
I don't see a lot of point negatively gearing a property if you are scratching to make ends meet every pay period. I appreciate that may seem a silly thing to say on $130K but I have seen enough people earning similar (and more) without much in reserve.
NG and PG both have their position in a property investment strategy – it is just that one strategy may suit an individual better than the other. Of course there are also the opportunities to purchase an IP which has cashflow and which has the capacity to be valued added.
Hi Boshie,
Apparently you can rent out your PPoR for up to 6 years without being exposed to capital gain for that period.
Provided you havn't bought and lived at another house which you nominate as your PPoR.
Ring ATO 132861 8am to 6pm.
I think the income is assessable in the names of the owners, but you can offset it with exps such as rates, insurance, agent fees, gardening etc.
Once again the online ATO website can provide you with publications with regards to what you can claim whilst the property is being rented out.
Regards
Hi Boshie,
Apparently you can rent out your PPoR for up to 6 years without being exposed to capital gain for that period.
Provided you havn't bought and lived at another house which you nominate as your PPoR.
Ring ATO 132861 8am to 6pm.
I think the income is assessable in the names of the owners, but you can offset it with exps such as rates, insurance, agent fees, gardening etc.
Once again the online ATO website can provide you with publications with regards to what you can claim whilst the property is being rented out.
Regards
Hi Boshie,
Apparently you can rent out your PPoR for up to 6 years without being exposed to capital gain for that period.
Provided you havn't bought and lived at another house which you nominate as your PPoR.
Ring ATO 132861 8am to 6pm.
I think the income is assessable in the names of the owners, but you can offset it with exps such as rates, insurance, agent fees, gardening etc.
Once again the online ATO website can provide you with publications with regards to what you can claim whilst the property is being rented out.
Regards
Hi all (again),
So, I'm a little confused again as I've been told that if we incorporate all 3 debts (2 x investment loans on the same property which is our PPoR plus a $22k credit card debt) into the one loan whilst the property is still our PPoR, then when it becomes a rental property we can claim the full amount of interest on this loan as it is now our investment property??
Does that make sense?!?!?
Wow that really couldn't be any further from the truth! Sorry but that would just be creating a financial/tax nightmare. Who told you this anyway? I hope it was just a work colleague or friend and not a broker or accountant?
Ahhh geeze boshie, Nathan is right – that advice is really bad.
Doing that will mix up a whole lot of investment deb with consumer debt.
It doesn't matter that the PPOR is going to become an IP – tax deductibility is determined by "purpose" rather than the security that the loan is against.
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]
Nathan & Jamie,
Thankyou so much for your invaluable advice. I couldn't get my head around this advice (and obviously for good reason). Unfortunately it came from the Bank (Big 4) – scary isn't it !!! Makes you wonder how many people are getting the wrong advice and actually going through with it.
This website is a Godsend for people like me and I appreciate all the time and effort that everyone has put into ensuring I dont make a huge mistake.
Considering my situation, should I be combining the 2 loans into one – as only the larger of the 2 loans is linked with an offset account. That way, the 2nd loan of $136k will be joined with the larger one and thereby offset?
Thankyou
boshie
Yes Jamie don't you just love such advice from lenders.
Shame they won't put it in writing.
Whatever you do not take up such advice as you will be paying for it forever and a day.
Good structured advice away from your Bank is the way to go.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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