Hi Everyone, So I have a love for Investing whether its Stocks/Property/FX/Bonds etc..
As it stands I have one property that is currently rented and I’m looking to expand. Here are the Numbers:
Rented Property
♦ Property Value: $390,000
♦ LVR: 86% ∴ Mortgage: $335,00 @ 4.46 FULL OFFSET
♦ P&I Per a Month: $1636
♦ I Per Month: $1160 (Note: I’m currently paying P&I)
♦ Monthly Rental Income: $1,450Personal
♦ Income: $4550 P/M Net
♦ Offset Account: $18,000
♦ Asset (Minus Property): $20,000
♦ Debts(Minus Property): $0.0
♦ Currently Living at Home Rent Free (For Now)I’m looking to buy a Property around the $200,000 mark on a 95% Full LMI Cap + SD.
Given that information do you think this is fair decision or if you have any ideas/advice I would greatly appreciate that.
Regards.Switch your existing investment property to interest only – you gain no benefit from having it structured on P&I. You can then just store the extra funds in the offset account.
Otherwise you’re potentially putting tax paid cash into investment debt, which is a bad habit if you’re ever to buy a PPOR, as you’ll want to have the PPOR deposit as large as possible.
If you’re looking at purchasing an investment property at 95%+LMI cap on top of this, you’re not going to have much luck. I’d seriously suggest you consider whether it’s worth just waiting a the very short amount of time it would take you to increase your deposit to cover a 90% LVR. You’ll limit your LMI costs, potentially avoid a second credit hit from a mortgage insurer and any future gain can be released as equity, instead of having to wait on the sidelines for the LVR to drop below 90% from 95%.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Thank-you for your advice Corey,
This is exactly the kind of feed back I was after.
Regards,
Geoff.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
