Loan and funds mixed up. What to do?

[Singo]

We are buying two properties which are settling within a week.

Property A needed 39k to settle and Property B needed 44.5k to settle. (The amounts are not exact)

So we kept around 41k in a transaction account for A costs.
And took a separate 45k loan for B costs. The plan was to use 44.5k for settlement and credit the balance 0.5k into that loan itself so that loan will be deductible in relation to Property B.

But now the bank has used the 45k loan to settle property A and credited the balance 6k into the transaction account.

So now only the interest on 39k of the 45k loan can be apportioned for property A. What about the interest on the balance 6k?

Have we lost the deductibility? The transaction account is solely used for investment purposes but expenses related to all properties are paid from it. (Insurance, interest, purchases, deposits, payments to tradies)

 

[Terry_w]

I can't understand exactly what has gone on but it looks messy. You should never use cash to settle on a property because of these reasons.

 

[Coconutwheels]

So from my understanding you now have $47k in your savings account?

I would pay off the $45k loan than redraw it to settle prop B. That loan will than be apportioned entirely to prop B.

 

[NedKelly]

How exactly did the bank do this? Surely you had to give them instructions on what to do.

 

[Singo]

Terry, that was cash left from PPOR sale. We don't have any non deductible debt, so have to use cash.

Coconutwheels, thank you very much. Perfect solution for this issue.

NedKelly, the issue is bank being a bank. We used property suburb names to give instructions and they messed it up. Probably should have used application number or loan number. And instructions were given verbally. I should have sent emails.

 

[Terry_w]

Terry, that was cash left from PPOR sale. We don't have any non deductible debt, so have to use cash.

No you don't. There are several creative strategies you could have employed using private loans.

 

[Singo]

No you don't. There are several creative strategies you could have employed using private loans.

Any examples Terry? Thanks.
Seems I gotta learn lots and lots more.

 

[Terry_w]

Any examples Terry? Thanks.
Seems I gotta learn lots and lots more.

I'd rather not give out too much, just think who could you borrow money from temporarily, and what if they didn't have the money to lend you.

 

[Singo]

I'd rather not give out too much, just think who could you borrow money from temporarily, and what if they didn't have the money to lend you.

Thanks Terry!