Line of Credit or Offset account ?

Hi,
I?ve got a question regarding a correct financial structure to allow me buying one IP and then use the equity that is gained in the past 3 years.
Here?s my current scenario under single Banking Institutions:

PPoR: None as I?m renting at the moment.
IP1: Regional town 1
IP2: Sydney Suburban area1
IP3: Still looking?.


I?d like to know if I should apply a Line of Credit Account (LOC1) that is linked to my IP1 and then use the LOC1 to finance the IP2 and then another LOC2 to finance IP3 so on? etc?

or
should I just leave it under single bank and then link the largest loan to one single offset account ?

Which one is correct ?

Thanks in advance
 
I strongly suggest you run your situation past an IP savy mortgage/financial strategist. Its the only the way you should be taking financial advice as you will provide them with all your specific current information and what you are trying to ultimately achieve.
I hope this helps.
 
Equity release via a term loan - have the funds sitting as a redraw. Make sure its a separate facility/loan.

Offset against one of the IP's since you don't have o/o debt. Save like ya mamma gave ya in the offset for future use (assuming you have no equity to tap into via a loan).
 
Don't use an offset as you could lose the deductibility of interest.

Generally you would want to use a LOC as you can apply borrowed funds directly. However it would be preferrable to use a term loan if possible, as long as you can pay directly from the loan account.

Once the LOC is drawn you can convert it to a IO term loan to avoid the possibility of it being called in.
 
Equity release via a term loan - have the funds sitting as a redraw. Make sure its a separate facility/loan.

Offset against one of the IP's since you don't have o/o debt. Save like ya mamma gave ya in the offset for future use (assuming you have no equity to tap into via a loan).

So do you mean different bank for each LOC account ?
 
No - you'd have the original loan and equity release with the same bank (ie. you wouldn't have your current loan with CBA and the equity release with Westpac)

Cheers

Jamie

Ah I see, so to avoid cross collateralization I do n't have to be with different lender :)

Thanks.
 
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