How to structure finances for PPOR and IP?

[Hypnotic Cat]

My situation - I have recently sold PPOR and have about $500k available.

My aim is to:
1. Purchase a PPOR up to $500k incl costs
2. Purchase an IP up to $250k (within 12 months of PPOR purchase)

My income is not very high, only around $45 to $50K at present
I have been pre-approved up to around $230k

Any suggestions on how to structure finances?

Should I be looking at Interest only with 100% offset?

thanks

 

[Terry_w]

Consider, gifting $500k to discretionary trust. Then borrow $500k from a discretionary trust which takes a mortgage over your property. Nil interest rate.

Then take out a small $50k LOC on the PPOR, get consent of trustee to allow bank to take out first mortgage with trustee taking out second. Use this as deposit for the IP and borrow 80% from a second bank.

Result=
Strong asset protection if you were to go bankrupt
Main residence PPOR exemption
100% borrowings on everything.
If you were to move out of PPOR the interest free loan could be refinanced with a bank and 100% of interest deductible.
This frees up cash to use to buy a new PPOR without having to sell the old one.

Seek LEGAL advice before attempting this

 

[Spades]

Hi Terry_w,

Awesome advice from a different angle!!!

Kudos

Cheers Spades.

 

[Hypnotic Cat]

Thanks Terry,
I will have to investigate further and look at what is involved in setting this up.
Does all of this have to be done prior to purchase of PPOR? I'm making a best and final offer on a place this Tuesday.
thanks and regards

 

[Terry_w]

Thanks Terry,
I will have to investigate further and look at what is involved in setting this up.
Does all of this have to be done prior to purchase of PPOR? I'm making a best and final offer on a place this Tuesday.
thanks and regards

It certainly does