Hi Jamie,
I might have an interesting question for you.
I’m looking at my first propert ever and I’m targeting positive cash flow however because I only have 5% of the deposit together, right now even on interest only if I’m lucky I’ll make maybe 30ish bucks a month (depending on the ROI on the property). So I’ve been throwing the idea of:
– Buy now so I can get into the market while it’s low
– Pay principle and interest over the next few years
– Once I’ve achieved LVR of 80% change to Interest Only to get a good positive cashflowWhat are your thoughts on this approach?
Thanks for the previous info before, it has got me thinking
Matt.Hi Matt
Generally speaking – I’d recommend IO for an investment if the client a) has an owner occupied loan or other non deductible debt they could pay off first or b) they don’t have any non deductible debt right now – but may do so in the future.
One of the only times where I’d recommend against IO is where the borrower isn’t disciplined with money.
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]
I assume then, that once the term of the original loan is up, the exact principle amount is now in your offset account because it has been so diligently saved for so many years. Now you pay the mortgage off?
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