Hi,
I wouldn't mind comments on my loan setup.
I didn't want cross- collaterisation like my bank suggested and came up with this:
1st loan:
Secured against the investment property 80% value (approx. $320k and disbursed at settlement). *
*
2nd loan
Secured against our home equity for the amount of $158k . *This loan will be used to pay 20% value of the investment property ($78k) *the stamp duty ($12k), *and legal fees etc. (approx. $1k). After settlement we will use approx. another $2k to do a few things to the investment property (backyard needs landscaping/turfing, carpets professionally cleaned/etc). This would leave approx. $65k ready for a deposit in the future to purchase a second investment property and/or rainy day fund.*
We are hoping that by setting it up this way we don't have cross collateralisation which will help us if we want to purchase/sell even more investment properties in the future. Both loans are set up on interest only.*
My concern is the 2nd loan which was initially disbursed into our everyday savings account. *Within 24hrs we transferred all the money as follows: $108k now parked in an new offset account waiting for settlement when we will then use most of it and $50k which I transferred *back on loan (ready for redraw if needed or for a 2nd investment property in the future). My worry is the initial transfer into our everyday saving account but I hope that so long as I keep records for every transaction and show that the loan money has only be use for the investment property the interest for this loan will all still be *tax deductible?*
Also after settlement should I move any remaining money in the offset back to the loan or just leave *it in the offset account?*
I wouldn't mind comments on my loan setup.
I didn't want cross- collaterisation like my bank suggested and came up with this:
1st loan:
Secured against the investment property 80% value (approx. $320k and disbursed at settlement). *
*
2nd loan
Secured against our home equity for the amount of $158k . *This loan will be used to pay 20% value of the investment property ($78k) *the stamp duty ($12k), *and legal fees etc. (approx. $1k). After settlement we will use approx. another $2k to do a few things to the investment property (backyard needs landscaping/turfing, carpets professionally cleaned/etc). This would leave approx. $65k ready for a deposit in the future to purchase a second investment property and/or rainy day fund.*
We are hoping that by setting it up this way we don't have cross collateralisation which will help us if we want to purchase/sell even more investment properties in the future. Both loans are set up on interest only.*
My concern is the 2nd loan which was initially disbursed into our everyday savings account. *Within 24hrs we transferred all the money as follows: $108k now parked in an new offset account waiting for settlement when we will then use most of it and $50k which I transferred *back on loan (ready for redraw if needed or for a 2nd investment property in the future). My worry is the initial transfer into our everyday saving account but I hope that so long as I keep records for every transaction and show that the loan money has only be use for the investment property the interest for this loan will all still be *tax deductible?*
Also after settlement should I move any remaining money in the offset back to the loan or just leave *it in the offset account?*