Hi all. I have asked this question before but i tend to make it confusing. I will try to keep it simple.
My IP Is broken into two loans with the smaller loan of $50,000 being secured against my IP.
I am about to inject $100,000 cash into my loans. I have two options
1# Pay the whole $100,000 of PPOR leaving me with a smaller available LOC on PPOR due to the $50,000 security already attached.
( PPOR value minus banks 15% buffer minus $50,000 security minus outstanding debt = available LOC)
OR
2# As instructed by the bank i could pay $20,000 of the IP(Reducing loan to 95% LVR) releasing the security from my PPOR and pay remaining $80,000 of PPOR. This gives me a larger available LOC due to removal of security but i have paid off some tax deductible debt instead of all non deductible( My PPOR ). But the big bonus is uncrossing my loans.
What are your thoughts. There are merits with both scenarios.
My IP Is broken into two loans with the smaller loan of $50,000 being secured against my IP.
I am about to inject $100,000 cash into my loans
. I have two options1# Pay the whole $100,000 of PPOR leaving me with a smaller available LOC on PPOR due to the $50,000 security already attached.
( PPOR value minus banks 15% buffer minus $50,000 security minus outstanding debt = available LOC)
OR
2# As instructed by the bank i could pay $20,000 of the IP(Reducing loan to 95% LVR) releasing the security from my PPOR and pay remaining $80,000 of PPOR. This gives me a larger available LOC due to removal of security but i have paid off some tax deductible debt instead of all non deductible( My PPOR ). But the big bonus is uncrossing my loans.
What are your thoughts. There are merits with both scenarios.
