Finance gurus please help me restructure.

[YoungNatalia]

Hi Everyone,

Although, I have not posted on this forum before, I have learnt a great deal just by reading here.

I have a few loans. My aim to refinance to possibly allow me to invest into another IP.


Prop,Est Val,Loan, Lender,Rate, Repayment Type
PPOR, 400K, 122K, RHG, Variable, IO
PPOR, 400K, 123K(LOC), RHG, Variable, IO
IP1, 375K, 226K, CBA, Fixed 7.09 (19 Jan 2010), IO
IP2, 325k, 250K, ING, Fixed 7.79 (5 Oct 2012), IO
IP3, 325K, 235K, CBA, Fixed 6.64 (7 Jun 2011), IO
IP4, 325K, 235K, CBA, Variable, IO


I also have car loan $11K and a personal loan, $25K at ANZ.

I firmly believe that the equity in my PPOR is about $150K.

I want to refinance my PPOR to get the maximum equity. My plan is to
clear the car and personal loan with the equity, which would improve my
servicevility. I should have some money left to invest into another IP.

Another line of thought that I have is to upgrade IP1 into my PPOR. I already
have talked to a town planer and definitely there is room for expanding the
existing house. I think I would be spending somewhere between 100K to 200K
for the upgrade. The money for upgrading, I am hoping to generate from
refinancing the IP1 (and not my current PPOR)

The rental potential of my current PPOR is $1600/month (should I upgrade and move into IP1, thus turning my PPOR into IP.

What I am trying to determine, is which one to do first. Should I refinance
the current PPOR first or should upgrade IP1 into PPOR and then re-finance.

Which approach would be easier in term of obtaining loans?

Thanks a lot.

 

[Qlds007]

Subject to serviceability i cant see an issue in doing one before the other.

Obviously might be some deductibility considerations as you will increasing your NDD.

If you are looking at refinancing your current PPOR then you have free reign on your choice of lenders upto 80% lvr however in raising additional funds on your IP 1 will be limited to CBA because of the fixed rate.

Box the non deductible debt into 1 and link the offset account to this sub account so you can work it down as quickly as possible and then sit the investment LOC behind allowing you to fund the deposits for the next IP or two.

 

[Rolf Latham]

What Richard said

and in addition use a debt recycle strategy to more quickly exchange Non deductible for deductible debt.

Does need a considered approach to make sure you use the right lender at the right time for the right purpose.

ta
rolf