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From: Mike .
Dilema, Dilema, Dilema
From: Robert
Date: 6/18/00
Time: 11:03:30 PM
I'm just about to settle on my first IP, after having contracted it back in December '99, Yeah.
But now I'm in a bit of a quandary on a situation that will be cropping up very soon.
I have purchased a new property in Brissie (these are real figures) for $195 000. I took vendors financing 80% bank - 20% vendor. Now this is where my sticky point comes out. The vendors finance is at 12% IO on $39 000 that needs to be paid back in 2 years. And $156 000 in a LOC. The property has gone up in value by about 15-20%. The now query is: (I'll list this in 3 parts for ease of reading.)
1/ I can repay the vendors amount in full in approx 15-16 months. Leaving me with a LOC mortgage of $156000 on a property that has gained to $215-$220 000. Leaving me with a +geared property to the value of $50-80 per week.
2/ Refinance the property in 6 months time to fully pay out the vendors finance and have the property mortgaged to a LOC of $195000. Leaving the property -geared to the value of $15-20 per week.
OR
3/ I can pay approx $10-12 000 in the next 6 months of the vendors finance and refinance the property to $184-186 000 to have a +geared property to the value of $10 per week.
WOW, I've just had a blinding flash, why don't I refinance to the value of a LOC at $195 000 being option number 2 and then with my extra $10-12 000 pay this off the LOC. That way I still have that money available to me when I want and the property is then at a +geared ratio.
You've got to love these LOC's.
Any response to the above would still be greatly appreciated.
Robert
Dilema, Dilema, Dilema
From: Robert
Date: 6/18/00
Time: 11:03:30 PM
I'm just about to settle on my first IP, after having contracted it back in December '99, Yeah.
But now I'm in a bit of a quandary on a situation that will be cropping up very soon.
I have purchased a new property in Brissie (these are real figures) for $195 000. I took vendors financing 80% bank - 20% vendor. Now this is where my sticky point comes out. The vendors finance is at 12% IO on $39 000 that needs to be paid back in 2 years. And $156 000 in a LOC. The property has gone up in value by about 15-20%. The now query is: (I'll list this in 3 parts for ease of reading.)
1/ I can repay the vendors amount in full in approx 15-16 months. Leaving me with a LOC mortgage of $156000 on a property that has gained to $215-$220 000. Leaving me with a +geared property to the value of $50-80 per week.
2/ Refinance the property in 6 months time to fully pay out the vendors finance and have the property mortgaged to a LOC of $195000. Leaving the property -geared to the value of $15-20 per week.
OR
3/ I can pay approx $10-12 000 in the next 6 months of the vendors finance and refinance the property to $184-186 000 to have a +geared property to the value of $10 per week.
WOW, I've just had a blinding flash, why don't I refinance to the value of a LOC at $195 000 being option number 2 and then with my extra $10-12 000 pay this off the LOC. That way I still have that money available to me when I want and the property is then at a +geared ratio.
You've got to love these LOC's.
Any response to the above would still be greatly appreciated.
Robert
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