G'day,
Firstly must say extremely glad I stumbled across this site, forum discussions are extremely helpful - it's a steep learning curve!
That said, I was after some guidance on structuring loans for first IP, and advice on whether to following make sense:
- current PPOR value $550K, outstanding loan $320K, with $40K sitting in redraw facility
- I would like to retain $40K redraw as 'accessable savings', rather than using for deposit, so intend on transferring across in full to mortgage offset account, thus increasing outstanding loan to $360K
- intend on releasing equity in PPOR by setting up an LOC (interest only loan, 80% LVR to avoid LMI) with full offset account, which should give me around $80K to help with deposit for IP. This will be taken out through my current lender as establishing it will be a relatively straight forward process, and also so that I can use my current mortgage offset account as the LOC offset account as well (simpler, less accounts to manage)
- balance of IP purchase is to be funded through a 3rd interest only loan either through my current lender, or someone else, depending on best offer available. The size of this loan will be anywhere from 80% to 95% of the purchase price, depending on how much deposit I choose to place with LOC, and possibly subject to LMI. If taken out through my current lender, I want to ensure not the cross collateralise (for security resons only), but either way, I am assuming this 3rd loan will require yet another offset facility through which to manage loan reayments?
I am clear on the fact that the LOC account should only be used for investment property related expediture only (for tax deduction reasons), and that repayments should be made through an offset account. However, how many offset accounts are required across the 3 loans? Surely 1 offset linked to all 3 laons would be the simplest / easiest to manage, used to recieve salaries and rental payments, and from which to make monthly reayments on all loans.
Any advice, tips (or criticism!) would be greatly appreciated
Many thanks
Y7
Firstly must say extremely glad I stumbled across this site, forum discussions are extremely helpful - it's a steep learning curve!
That said, I was after some guidance on structuring loans for first IP, and advice on whether to following make sense:
- current PPOR value $550K, outstanding loan $320K, with $40K sitting in redraw facility
- I would like to retain $40K redraw as 'accessable savings', rather than using for deposit, so intend on transferring across in full to mortgage offset account, thus increasing outstanding loan to $360K
- intend on releasing equity in PPOR by setting up an LOC (interest only loan, 80% LVR to avoid LMI) with full offset account, which should give me around $80K to help with deposit for IP. This will be taken out through my current lender as establishing it will be a relatively straight forward process, and also so that I can use my current mortgage offset account as the LOC offset account as well (simpler, less accounts to manage)
- balance of IP purchase is to be funded through a 3rd interest only loan either through my current lender, or someone else, depending on best offer available. The size of this loan will be anywhere from 80% to 95% of the purchase price, depending on how much deposit I choose to place with LOC, and possibly subject to LMI. If taken out through my current lender, I want to ensure not the cross collateralise (for security resons only), but either way, I am assuming this 3rd loan will require yet another offset facility through which to manage loan reayments?
I am clear on the fact that the LOC account should only be used for investment property related expediture only (for tax deduction reasons), and that repayments should be made through an offset account. However, how many offset accounts are required across the 3 loans? Surely 1 offset linked to all 3 laons would be the simplest / easiest to manage, used to recieve salaries and rental payments, and from which to make monthly reayments on all loans.
Any advice, tips (or criticism!) would be greatly appreciated
Many thanks
Y7
