Help Buying PPOR

[brocky05]

HI There

After some help or advice before I take the plunge and want to make sure my mortgage innovator is looking after my best interests and not the bank lol ( haha yeah right )

I have at the moment an Investment property I paid $452,000 for 5 years ago I borrowed 414,000 from Commonwealth and to date the outstanding amount on the loan is $145,000. I have been making alot of extra repayments. Problem is now I have found a block of land and want to build a PPOR its a home and land package for $410,000. I just filled out the forms to see how much the bank will lend me but what is my best options I have a feeling the bank wont offer me the best advice and will be thinking of how much money they can take from me. Whats the best loan to get and best way to approach this. I would like to keep my investment loan at $145,000 and not redraw on it if I can help. Also do you have to pay stamp duty when building a new house in nsw and the bank also mentioned I wont need mortgage insurance as they use my current property as security.

Thanks Guys looking forward to your answers

 

[The Y-man]

Sorry, but not enough info to make any sort of observation............
For starters:
your house hold income
employment status
kids
other loans
rental income......

The Y-man

 

[fresh investor]

Not answering all of your questions, but interest payments on an investment property is tax deductible. Interest payments on PPOR is not. So better off haveing as much borrowed against the IP and oweing the least on the PPOR.

Well done paying down your IP that much in 5 years! You must earn enough to pay considerable taxes. Claiming the interest on tax will be an advantage.

People with much more knowledge then me will comment on this, but I hope it helps.

Fresh.

 

[The Y-man]

Not answering all of your questions, but interest payments on an investment property is tax deductible. Interest payments on PPOR is not. So better off haveing as much borrowed against the IP and oweing the least on the PPOR.

And in this case, the captial is now locked into the IP so can not be used for a PPOR and still have tax deductibility.

The Y-man

 

[fresh investor]

My bad then, still learning. Guess that's why structuring loans is so important in the beginning.

Fresh.

 

[brocky05]

HI Guys

Far from earning good money at all im a battler but a penny saver.

Im only on 50K after tax
Other half 20K after tax

At the moment property rents for $390 a week we see in the hand after expenses $360.

I just hate debt and yes I know I have done it ALL VERY WRONG this is what happens when you have no guidance except being brought up to save every hard earned dollar and I hate to say it im such a tight **** I wouldnt pay to see a financial adviser even though if I did I probably would have made some much wiser choices anyway im slowly finally learning.......

 

[The Y-man]

I just hate debt and yes I know I have done it ALL VERY WRONG

Wouldn't beat youself up over it - it's not that bad in your situation because
1. yout tax bracket is low anyway
2. you probably need that income coming in to help with cashflow

I wouldnt pay to see a financial adviser even though if I did I probably would have made some much wiser choices anyway im slowly finally learning.......

Nah - probably wouldn't have helped. I don't think you missed out on much.

Have a chat to a (good) broker. One will be along shortly......

The Y-man

 

[Nem]

You dont need financial adviser, you need to read this forums every day and night for long time and learn as much as you can, everything is here! I wish I discovered them long time ago....

I'll try to reply and would welcome more experienced professional people to correct me, but from what I've learn here, I would sell your IP, take as much money as you can to invest in your PPOR since interest there will not be tax deductible and then use equity to buy new IP and set up your loan structure correctly from the beginning.

But first, what is your plan? Keeping one IP or buy more in the future? You need to think of different strategies and decide on your one! Thats what this forums are all about

 

[Hooray]

I just hate debt

Do you still hate debt?

 

[brocky05]

I still hate debt yes but im slowly getting over. Selliny my IP isnt really an option I had i on the market and dropped it 50K and still no interest it was on the market for 3 years no offers its a awesome house its just the area. My long term goal since I cant shift it is to keep it well into retirement and it will supplement my retirement income. ( its the only way I can see any long term benefit ) It seems like I have done everything backwards. Im confident I will be able to borrow another 400,000 its just I want to get all my loans set up right and ultimately set them up so I get the best return not the bank.... I will be happy with PPOR and current investment property I cant see my ever affording anything else ever but possibly wouldnt mind picking up a very cheap unit as a 2nd investment once again to supplement retirement income thats if I live that long

 

[Rolf Latham]

Hiya

I'd be looking into a concept called debt recycling

With the help of a decent financial planner you can claw back some of the effects of emotionally based financial decisions over time..... But it will take some time.

All is not lost, and in reality having made so much equity isn't a bad thing, it's just it hasn t been done in an optimum way.

There are no wrong decisions at the time they are taken. A poorly informed decision is oodles better than a nil decision so be happy !

Ta

Rolf