Borrowing extra for immediate Reno

J

jojo2009

I'm about to buy a 3 bedroom house in need of some immediate reapairs in order to make it livable - my loan will only cover the purchase price. So I wanted to ask if anyone has some ideas about loan structures which allow you to borrow purchase price - but also extra for renovation.
Joe
 
jojo

If you have a PPOR - and some equity in it - you could always take out a separate loan using the PPOR as security. As long as you keep these loan funds separate from your PPOR loan and the funds are used wholly for renovating the IP, the interest will be deductible.

Cheers
LynnH
 
We've done a lot of this over the years. As LynnH said use a LOC on an existing property if that is available to you. Or we oet lots on renos on Visa for a couple of months until the reno was done, got the property revalued and drew down on the created equity to pay off the Visa + some left over as a depopsit for the next place.

You need to make sure your reno will value up though. And talk to a MB about getting a place revalued so soon after purchase in the current lending environment to make sure the lender / MI will do it.
 
either way (refinance or LOC), your still transfering the loan from a visa CC to a IP secured loan. This raises some question in my mind.

1) Are interest on CC tax deductable when used for IP related expences?

2) Is transfer of loans from an IP to pay-off IP expences on a CC tax deductable?

3) What if the CC had contaminated expences (IP and discretionary spendings). Would this influence the tax deductability - assuming CC IR are tax deductable?
 
Propertunity said:
We've done a lot of this over the years. As LynnH said use a LOC on an existing property if that is available to you. Or we oet lots on renos on Visa for a couple of months until the reno was done, got the property revalued and drew down on the created equity to pay off the Visa + some left over as a depopsit for the next place.

You need to make sure your reno will value up though. And talk to a MB about getting a place revalued so soon after purchase in the current lending environment to make sure the lender / MI will do it.
Click to expand...

If he has incured LMI for the amount he burrowed im lead to believe that he can not have a reval done for 6 months (insurers policy)

Regs,

RH
 
jojo2009 said:
many thanks for all the advice - hmmm might just minimise the amount of immediate reno and give those credit cards a bashing.
Click to expand...

How much do you require?

You could apply for a personal loan up to $50k
rates are approx 13% depending on strength of appl
 
I did my first of many renos with a personal loan. The 6 mth reno allowed me to get a reval from the purchase price of $425k to $700k with a $50k reno/loan. Even at 20% for 6mths ie $5k I think you would agree that if your numbers stack up you will be able to find the funds to do the reno.

PS Yes Genworth has restricted revals within 6 mths

Hope this helps

Jane

After thought: I saw the gentleman who started Eagle Boys speak recently. He took out a personal 'car loan' to buy a hot bread shop in Darwin as his first step. The bank manager walked in one day and said how is that car going - his reply " Great your leaning on the dashboard at the moment"
 
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