Can I add stamp duty etc to investment loan

Hi everyone, I'm in the process of getting an investment loan for an OTP property and would like to know if I can add the stamp duty, conveyance fees, depreciation report and new curtains/blinds to the loan.
I will be borrowing roughly $22000 more than the cost of the property to cover these costs with whatever is left over deposited back into the loan.
I'm thinking I can but want to make sure so I can fix it now if I need to.

Thanks.. Oscar
 
The short answer is no - you can't add these cost onto the loan. And with OTP you should plan to have a buffer saved just in case the val comes short. I would be very hesitant to buy OTP with no financial wiggle room.

How long till settlement?
 
Thanks for the reply Jess and Terry.
Settlement will be end of July. The valuation should be fine as the purchase price is in the same ballpark as other similar sold properties in the area. Some have sold for a little less and others little more. I do have some financial wriggle room in shares which can be sold in worst case scenario, hopefully there'll be no need for that.
Terry, I have a lot of equity in my home and have already taken a loan out for the initial deposit.
Could I pay that back with the investment loan if I borrow 100% of the purchase price.
 
Hi Oscar

Just got to keep things simple.

If you've got equity in your current home you need to:

1. Access enough equity to cover the deposit/costs on your IP. Set up this loan as a separate loan account. If you can access enough to cover off a 20% deposit and costs that would be ideal.

2. Set up another loan to cover the remaining 80% of the IP purchase price. This can be with the same or another bank. Just make sure that this loan is secured ONLY by the IP.

Cheers

Jamie
 
Terry, I have a lot of equity in my home and have already taken a loan out for the initial deposit.
Could I pay that back with the investment loan if I borrow 100% of the purchase price.

Depends how you initially structured it. If you used redraw then technically no. But if you had a separate split then yes - it would be refinancing one loan with another so deductibility won't change.
 
Thanks for the reply Jamie

I just got off the phone to my broker who said just leave it the way it is and give the accountant a schedule or what the loan covered and he can sort out what interest paid was for the investment loan which is tax deductible and what isn't. I don't like that idea as it's messy and not obviously transparent so another option was given. I can have a split on the loan, one part which covers 100% of purchase price including original 10% deposit and a smaller split to cover the extras. I like that idea as it simplifies things.
It's not as perfect as Jamies example but it'll do.
Thanks for the great replies.
 
Depends how you initially structured it. If you used redraw then technically no. But if you had a separate split then yes - it would be refinancing one loan with another so deductibility won't change.

Thank god I got that part right, yes it was set up as a split.

Thanks again.. Oscar
 
Thanks for the reply Jess and Terry.
Settlement will be end of July. The valuation should be fine as the purchase price is in the same ballpark as other similar sold properties in the area. Some have sold for a little less and others little more. I do have some financial wriggle room in shares which can be sold in worst case scenario, hopefully there'll be no need for that.
Terry, I have a lot of equity in my home and have already taken a loan out for the initial deposit.
Could I pay that back with the investment loan if I borrow 100% of the purchase price.
You need to understand that you can only borrow 100% of the purchase price in one loan if the are either 2 properties as security, (x-coll) or the price has risen enough to give you instant equity.

You are not going to get 1 loan for 100%+ unless they take your ppor as security as well.

You are best off doing what Jamie said - using equity from the PPOR and borrowing the rest. You are still borrowing 100% but in 2 loans secured by 2 separate properties.

I'm thinking you want 1 loan for 100%+ secured by your ip only, right, rather than a split on ppor and 80% on ip?
 
You need to understand that you can only borrow 100% of the purchase price in one loan if the are either 2 properties as security, (x-coll) or the price has risen enough to give you instant equity.

You are not going to get 1 loan for 100%+ unless they take your ppor as security as well.

You are best off doing what Jamie said - using equity from the PPOR and borrowing the rest. You are still borrowing 100% but in 2 loans secured by 2 separate properties.

I'm thinking you want 1 loan for 100%+ secured by your ip only, right, rather than a split on ppor and 80% on ip?

I was going to just use my PPOR as security as it's easier but I do understand there is a risk as both properties could be at risk.
I currently have a split loan with ING which was set up for the 10% deposit on the Ip. If I extend that to say 20% and then get the 80% with Mebank will interest on both loans be tax deductible or only the 80% portion which has the Ip secured to it.
I should really know the answer to this and feel a little embarrassed asking.
 
Don't be embarrassed!

Yes that sounds like a good way to do it and both loans should be deductible.

Maybe rethink ME bank though unless you've got time on your side - their turn around times are appalling at the moment.
 
Thanks Jess

I'll let my broker know of the new plan, we have 2 months before settlement so time shouldn't be an issue.
Thanks again, your help has greatly been appreciated.
 
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