Buying both PPOR and IP possible?

[write2abdul]

I'm looking to buy both PPOR and IP and wanted your advise if it is possible with the following plan

I have a deposit of 120K and both me and my wife have eligibility of 1 M

First, I would like to buy a PPOR

- Price - 650K with 10% deposit(65k) + stamp duty(28k) - total 93K
- LMI capitalized in the loan or no LMI with ING.
- I/O loan with offset

I'm getting a good deal on the unit. 20 - 30K less than the comparable sales in the area. Vendor bought elsewhere and want to settle quickly. I offered 30 days settlement instead of 42.

After 3 months, I would like to get my property re valued by the bank and get access to the extra equity around 30K and plus 20 -255K(from my remaining deposit) to buy an IP.

Am I doing it right?

 

[Rolf Latham]

I'm looking to buy both PPOR and IP and wanted your advise if it is possible with the following plan

I have a deposit of 120K and both me and my wife have eligibility of 1 M

First, I would like to buy a PPOR

- Price - 650K with 10% deposit(65k) + stamp duty(28k) - total 93K
- LMI capitalized in the loan or no LMI with ING.
- I/O loan with offset

dont think ING have that policy anymore

Anyway.........

assuming your val comes in higher and the lender allows you to top up ( choose wisely), then add the 25 k cash savings to the new ip Loan.

ie if your current PPOR loan is say 500 k, and your new equity split is 30 k, then take ur 25 k cash reduce the home loans plit to 475 and increase the IP deposit equity split to 55 k.

Slightly better tax benefit

ta
rolf

 

[Jamie M]

The ING no LMI was scrapped a couple of weeks (or less) after it was introduced :-(

Cheers

Jamie

 

[Redom]

I'm looking to buy both PPOR and IP and wanted your advise if it is possible with the following plan

I have a deposit of 120K and both me and my wife have eligibility of 1 M

First, I would like to buy a PPOR

- Price - 650K with 10% deposit(65k) + stamp duty(28k) - total 93K
- LMI capitalized in the loan or no LMI with ING.
- I/O loan with offset

I'm getting a good deal on the unit. 20 - 30K less than the comparable sales in the area. Vendor bought elsewhere and want to settle quickly. I offered 30 days settlement instead of 42.

After 3 months, I would like to get my property re valued by the bank and get access to the extra equity around 30K and plus 20 -255K(from my remaining deposit) to buy an IP.

Am I doing it right?

Have you already got that offer? As mentioned, its no longer running.

In terms of getting a good val so quickly after - its hard to actually get that result. The valuer will use the existing sale as the basis for a future valuation, without some renos/very sharp market gains, its unlikely you'll get a strong val.

But yes, overall, your doing it right.

Set up the extra 25k (if possible) as a separate loan split. Don't mix personal and investment debt.

Then use that 25k as the deposit for your next purchase - just be sure to not cross collateralise your loans.

Cheers,
Redom

 

[write2abdul]

Sorry guys for the late reply. I was traveling.


Ignore my lack of knowledge but how do I setup the loan split in my case.

dont think ING have that policy anymore

Anyway.........

assuming your val comes in higher and the lender allows you to top up ( choose wisely), then add the 25 k cash savings to the new ip Loan.

ie if your current PPOR loan is say 500 k, and your new equity split is 30 k, then take ur 25 k cash reduce the home loans plit to 475 and increase the IP deposit equity split to 55 k.

Slightly better tax benefit

ta
rolf

 

[Rolf Latham]

Sorry guys for the late reply. I was traveling.


Ignore my lack of knowledge but how do I setup the loan split in my case.

you make sure you use a lender that allows the split post settlement, pref without a new application.

You might be able to do the new loan split now before settling the new PPOR once you have an idea of your numbers

ta

rolf

 

[Marty McDonald]

Hi write2abdul,

It is going to be an increase application post settlement so a new application would be needed. The main things to consider when choosing the right lender:

1) Their cash out policy (at 90% LVR may be a few road blocks depending on lender) so need to choose one who is happy to cash out at this LVR and is OK for investment purposes ie not CBA.

2) They allow upfront valuations.