Can I use the equity in IP to pay its installment
- Thread starter mdv2008
- Start date
Yes, and you can eat your arm to prevent starvation too...
Are you for real? I'm sure you can do it, but isn't this a clear signal to you that you're overstretched?
Are you for real?
Which part of that leads to the overstretched comment?
MDV, yes you can, it's capitalising your interest. Just ensure that the LOC you use to make the loan payments doesn't have any personal transactions in it.
Also, some banks require a monthly payment on LOC's, some don't - so best to check.
Do a search on the forum and you'll find a few threads detailing how you can go about all this.
Also, some banks require a monthly payment on LOC's, some don't - so best to check.
Do a search on the forum and you'll find a few threads detailing how you can go about all this.
There are only two reasons to use debt to repay debt.
1. You're absolutely certain of a coming boom, and you need to gain cashflow to leverage higher.
2. You're up **** creek without a paddle.
Using debt to pay off debt is 3/4 of the way down the repossesion schedule. Of course, not everyone who uses debt to pay debt is in trouble, but we're not in the start of a boom cycle. If the OP asked in 2001, it would seem like a question about getting as heavily leveraged as possible.
In 2008, after 12 rate rises in a row, and record foreclosures etc etc, it's hard to think that it's anything else.
Hiya Sunder
There are other legitimate reasons too ............
A good example is someone that has PPOR debt. They cap their investment debt, and pay their PPOR debt at a more rapid rate.
ta
rolf
There are other legitimate reasons too ............
A good example is someone that has PPOR debt. They cap their investment debt, and pay their PPOR debt at a more rapid rate.
ta
rolf
I looked into this idea a few months ago.
With rising interest rates what would happen if they started heading up to the figures we had in the 80's of around 16%
I decided the shortfall could be funded by equity enabling me to hold on to the portfolio. Otherwise I would have to sell some in a depressed market.
With rising interest rates what would happen if they started heading up to the figures we had in the 80's of around 16%
I decided the shortfall could be funded by equity enabling me to hold on to the portfolio. Otherwise I would have to sell some in a depressed market.
Sunder,
Is there any chance you could enunciate to the forum your massive experience, wealth and authority levels under which you make such definitive cut & dried statements ??
What Rolf suggested is exactly what I am doing at the moment. Most of the equity I had was used to fund the purchase cost of another IP, and then the remaining equity is being used off to pay the interest on both the IP's.
I am putting my own money into the PPOR offset. This allows you to reduce your non-deductible PPOR interest payments quicker.
