Advice needed

[doozer]

Put simply I need advice as to the best way to finance the next IP. Our situation is as follows:

IP 1 : Value = $195k
Loan = $125k
Rent = $160p/w
IP 2 Value = $260k
Loan = $171k
Rent =$240p/w
IP 3 Value= $200k
Loan = $174k
Rent = $200p/w

All loans are IO except IP1 which has partial IO. We are currently renting @ $130p/w
No dependents
Combined income per annum not including rent from IPs = $80k

Obviously I would like to release the equity from the IPs to duplicate & purchase more but being IO on 5yr fixed rates the institution (ING) wants to charge a fortune for stamp duty, application fees etc etc. How I can avoid using money from our own pockets?? Sounds like a dumb question but I'm a little dense & I'm just waiting for the day the penny drops!

 

[Twitch]

There's no need to change or pay out your existing loans, instead set up additional one(s). For example, get 2 new LOCs secured on your IP1 and IP2. Your current lender should let you draw down $31k and $37k respectively, even more with LMI.

You could also x-coll and get a single LOC for $68k, but most in this forum would advise against it, even if it means openning 2 loans instead of 1.

Obviously your lenders valuer will have to agree with your valuations!

 

[Aceyducey]

doozer,

Have you spoken to a good mortgage broker?

Cheers,

Aceyducey

 

[agent007]

Hi Doozer,

I would suggest to talk to a good solicitor, accountant, mortgage broker and financial adviser (that does property). Define your target and the road map to get there as well as put protections in place. Only after that think about restructuring your loans. Some planning at the begining and safe you some $ and headaches alone the road.

Good luck,

James.