Finance

[WebBoard]

From: Mike .


RE-FINANCING MULTIPLE LOANS
From: FERNANDO
Date: 6/19/00
Time: 10:44:16 PM

I currently have 3 investment properties, of which one is owned outright. Last week i purchased my fourth property, and after numerous complications with the Bank Of Melbourne i have decided to refinance my loans elsewhere. Should i take out one loan for the three properties or have single loans? Should i make them interest only? Should i take out a LOC? Any comments will be appreciated. Thanks in advance

 

[WebBoard]

Greg M

Reply: 1
From: Mike .


Re: RE-FINANCING MULTIPLE LOANS
From: Greg M
Date: 6/20/00
Time: 9:32:16 PM

Fernando I dont know if this will suit your situation but it might point you in the right direction. I just refinanced my 4 props thru a broker he came up with St George portfolio loan which consists of a primary account and 2 sub accounts the 4 props are all attached to the 3 accounts one fixed for 1yr another fixed for 2yrs and the other is a LOC at a variable rate. In therory as you purchase another prop they just add another subaccount to a max of 10. The LOC is very handy for paying your ongoing costs but dont use it to buy luxuries. I have all income going into the LOC and I live on a 55day interest free credit card. Hope this helps.

 

[WebBoard]

Fernando

Reply: 1.1
From: Mike .


Re: RE-FINANCING MULTIPLE LOANS
From: Fernando
Date: 6/21/00
Time: 4:34:29 PM

I think that your loan setup is good, and also an easy way to attach more properties to the one loan, but it isn't good for me because i don't want to reduce the amount of interest off my loan because it will decrease my tax benefits. That is why i have setup interest only accounts. Thanks for your comments.

 

[WebBoard]

Owen

Reply: 1.1.1
From: Mike .


Re: RE-FINANCING MULTIPLE LOANS
From: Owen
Date: 6/22/00
Time: 12:21:08 PM

Fernando,

I have the same sort of set up as Greg but with the NAB. It's called the Investors Choice Package and contains as many loans as you require in as many configration as you require. I have my home loan, an IO investment loan and a standard savings account and soon to get a LOC. I get 0.5% of the standard interest rate (except for the LOC) for being in the Package, a free VISA GOLD card with 55 days interest free, no transaction costs whatsoever and no monthly fees, escape fees, loan conversion fees or application fees. The only cost is one $300 annual fee which I claim on tax off my IP loan.

Works for me. Owen

 

[WebBoard]

Terry A

Reply: 1.1.1.1
From: Mike .


Re: RE-FINANCING MULTIPLE LOANS
From: Terry A
Date: 6/20/00
Time: 12:47:34 AM

Hi Fernando,

It sounds like you are in a good position if you own one IP outright and have loans on two others. In my opinion interest only is the way to go to maximise your cash flow. Do you really need to refinance those two loans or can you get a better deal on interest rates elsewhere. If you can then go for it but if you are upset over the bank messing you around then try not to let emotions make you change an arrangement. If it is going to cost you then leave it and concentrate on the loan for the fourth property. I would also try to keep each loan separate but again if there are advantages in combining them, and only you know all the facts relevant to your situation, then go for it.

I do not have a LOC but from what I read here on the forum I am getting very interested in the flexibility it allows so on your property which you own you might consider a LOC in order to buy more IPs.

As I said above this is only an opinion, you will need to crunch the numbers on all possible options to come up with the best result.

Cheers, Terry

 

[WebBoard]

Fernando

Reply: 1.1.1.1.1
From: Mike .


Re: ATT TERRY A
From: FERNANDO
Date: 6/20/00
Time: 2:07:05 PM

I actually went to see a mortgage broker today and we took a step forward to refinance. I chose an interest only loan, and we combined all the loans together so that there is less maintance fees. This also helps when adding on more properties because you don't have to setup new accounts, the loan account already exsists.

He also suggests that a LOC would only be good if you were wanting to pay the loan off as soon as possible, if not it will only cost you more money for nothing, in other words if you are paying interest only you shouldn't have a LOC. I just thought you might want to know