Hi all
I will be looking at pulling about $400k equity from my PPR to use as separate deposits for both commercial ($200k) and residential ($200k) investment property. Given that the APRA rules, requirements and regulations are different between comm and resi will i need to split the equity into two separate loans of $200k?? Just curious
You should split the loan into 3. Original purpose loan, and one new loan for use of each property.
Not due to APRA rules but because of tax law. Interest is deductible based on purpose and use of the borrowed funds, therefore you need to claim interest against the property the borrowings relate to. This is best done with separate loans. There would also be mixed loan issues if you don\’t split.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Definitely keep it split from investment vs personal use – but preferably if you know the exact amounts needed then have the investment portions split for ease of accounting.
Pulling out that amount of funds will depend on the lender, some will restrict equity pulls greater than 50k, others will allow 500k without blinking an eye.
In the last month I’ve pushed through two at ~1mil a piece, in the current APRA constrained environment.
As always, use an investment focussed broker to ensure you current and future lending is working towards your investment goals than against it.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Definitely keep it split from investment vs personal use – but preferably if you know the exact amounts needed then have the investment portions split for ease of accounting.
Pulling out that amount of funds will depend on the lender, some will restrict equity pulls greater than 50k, others will allow 500k without blinking an eye.
In the last month I’ve pushed through two at ~1mil a piece, in the current APRA constrained environment.
As always, use an investment focussed broker to ensure you current and future lending is working towards your investment goals than against it.Yup, pretty much everything this guy says ^
D.T. | DT Property Management
http://www.dtproperty.com.au
Email Me | Phone MeAdelaide Property Management - whole Adelaide metro
Hi Andrew,
One thing to look out for when making an application for the cash out portion. There are many lenders who will flat out not lend for the purpose of paying a deposit on a commercial property, they consider this a business use and will try and push you into a more expensive business facility. You need to use a lender that will either not require a specific purpose for the funds or is comfortable with the purpose being business related. Given that the security for this loan is a PPOR, you should not accept paying a premium because of the purpose, there are lenders that can cater for your needs.
Regards
Agreed with the guys above, might look into a lender who can blend the loan, do the applications all in one residential and commercial, but keeps the rates separate.
Commercial lending is gagging for business so they rates in most cases are lower then residentials.
This means they can look at the scenario with both the commercial and residential hat, rather just being a residential home loans person
Hank Hong
Email MeGoogle Hank Hong he's pretty cool.
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