Hi there,
Planning to buy 2nd IP in a year time.
As a first step I am thinking for arranging finance for 2nd IP deposit and structuring importantly?.I understand that I?ll have to do valuation to get the $ amount & this time around happy to pay LMI to borrow more?..
Current Situation
Loan 1 - PPOR (Loan $240K) -> Linked offset $150K
Loan 2 ? 90K -> 8K Redraw (Equity Loan - tipped in to PPOR equity and borrowed upto 80 % to avoid LMI)
Loan 3 ? 263K (Secured only against the IP1)
All three loans are IO and in my name only? Loan 2 & 3 are used only for investment purposes?..this is how I am planning to dip into available equity to fund the deposit for 2nd IP & making sure its tax deductibility?.
Release equity from Loan 1 and Loan 3 (hopefully up to 90% and Pay LMI) into Loan 4. Set this loan as IO only, open the new offset account attached to this loan only?..draw the loan and put the money in the attached offset until needed for investment purposes?.
I prefer to use IO with offset setup for equity release rather than LOC (avoid the higher Interest rate)..
Am doing cross collateralization here, should I setup separate loan for each equity release or something? (i.e. PPOR equity Loan 4, PI1 equity Loan 5)
What is the best way to use the 8K sitting in redraw against Loan 2, can I just use this money from redraw and pay for IP2 investment costs? (there was forum earlier where discussion was around redraw money should go to seller?s account directly i.e cheque or something?.in my case I?ve confirmed with bank that they don?t allow to write cheque from redraw?.I?ll have to park it somewhere before I write cheque from, is there any issue doing that?)
Is this the appropriate way to go about this?
Any comments/feedback will be helpful?.
Thanks
Planning to buy 2nd IP in a year time.
As a first step I am thinking for arranging finance for 2nd IP deposit and structuring importantly?.I understand that I?ll have to do valuation to get the $ amount & this time around happy to pay LMI to borrow more?..
Current Situation
Loan 1 - PPOR (Loan $240K) -> Linked offset $150K
Loan 2 ? 90K -> 8K Redraw (Equity Loan - tipped in to PPOR equity and borrowed upto 80 % to avoid LMI)
Loan 3 ? 263K (Secured only against the IP1)
All three loans are IO and in my name only? Loan 2 & 3 are used only for investment purposes?..this is how I am planning to dip into available equity to fund the deposit for 2nd IP & making sure its tax deductibility?.
Release equity from Loan 1 and Loan 3 (hopefully up to 90% and Pay LMI) into Loan 4. Set this loan as IO only, open the new offset account attached to this loan only?..draw the loan and put the money in the attached offset until needed for investment purposes?.
I prefer to use IO with offset setup for equity release rather than LOC (avoid the higher Interest rate)..
Am doing cross collateralization here, should I setup separate loan for each equity release or something? (i.e. PPOR equity Loan 4, PI1 equity Loan 5)
What is the best way to use the 8K sitting in redraw against Loan 2, can I just use this money from redraw and pay for IP2 investment costs? (there was forum earlier where discussion was around redraw money should go to seller?s account directly i.e cheque or something?.in my case I?ve confirmed with bank that they don?t allow to write cheque from redraw?.I?ll have to park it somewhere before I write cheque from, is there any issue doing that?)
Is this the appropriate way to go about this?
Any comments/feedback will be helpful?.
Thanks