Finance structure question with private loan

[spludgey]

Okay, I've asked a related question before and I had some good responses then (thanks), but now the premise has changed a little and I'm relying on your advice once more.
My parents have got some cash available from selling a property (around $500k) and my parents were originally going to lend it to me to buy a property, then I'd refinance and give them the money back so that they could buy an IP themselves.
But my parents have now decided that they don't want to have to deal with tenants and asked me if I would be interested in borrowing the money at bank rates and just pay them the interest.
At the same time, my girlfriend and I have decided that we want to purchase a PPOR for around $800k.

Now, my question is what the best way to go about this is. Since I've got the $500k available now, I'd like to buy a couple of IPs as well. How do I go about this to maximise my tax deductibility and not negatively affecting my borrowing capacity.
My parents have also offered to guarantee for up to $200k on the PPOR to ensure that we can avoid paying LMI.

It's all a bit complicated, so I hope my explanation makes some sense.

 

[Terry_w]

Okay, I've asked a related question before and I had some good responses then (thanks), but now the premise has changed a little and I'm relying on your advice once more.
My parents have got some cash available from selling a property (around $500k) and my parents were originally going to lend it to me to buy a property, then I'd refinance and give them the money back so that they could buy an IP themselves.
But my parents have now decided that they don't want to have to deal with tenants and asked me if I would be interested in borrowing the money at bank rates and just pay them the interest.
At the same time, my girlfriend and I have decided that we want to purchase a PPOR for around $800k.

Now, my question is what the best way to go about this is. Since I've got the $500k available now, I'd like to buy a couple of IPs as well. How do I go about this to maximise my tax deductibility and not negatively affecting my borrowing capacity.
My parents have also offered to guarantee for up to $200k on the PPOR to ensure that we can avoid paying LMI.

It's all a bit complicated, so I hope my explanation makes some sense.

Just think of your parents as ANZ bank. How would you do it with ANZ?

You would have a written loan agreement with a registered mortgage.

Borrow to pay for your PPOR, pay it down and then reborrow for the investments - under a separate loan agreement.

 

[Rolf Latham]

The below are my views on the limited data vailable

Borrow the cash at commercial rates, and have a commercial loan agreement in place.See your accountant

Have that facility as IO

Use that money for deposit and costs on the IPs, maybe even going as far as 88 %+ cap lmi.

Borrow the 20% + costs from M&Dfor the new PPOR and allow a second mortgage or caveat behind the lender mortgage

If you must use a Family guarantee on the PPOR................. use a lender that only requires the 25 % loan to be cross secured to their property.

In theory, you are better off giving your parents the 5 % on the deposit anc costs money for the PPOR

Make sure you obtain well underwritten life and income protection insurance !!

See your soli to ask about what happens if you have relationship issues etc


Structure all your bank related lending so that you maximise your future capacity .

ta
rolf