Hi All,
Could I please have some advice on structuring my loan? This will be my first IP.
Future Position:
- Looking to purhcase land in immediate future for around $200,000, which will then have a PPOR built in around 5 years time (obviously borrowing money for that - probably around $350,000)
- Current house is a PPOR which we plan to swap into an IP in around 5 years time
Current Position:
- $305,000 loan, paid down to $280,000 (Principal and Interest loan)
- $80,000 in offset account.
- PPOR bought for $325,000 in 2008, estimate current value at $350,000
- Additional cashflow of around $30,000 per year. Risk of reduction in pay (restructure at work), resulting in around $10,000 less. Wife has potential to either gain additional $30,000 p.a at the start of 2015, or stay on same rate (PHD student)
I welcome any advice with regards to loan structuring, however the following is what I was thinking.
House Loan (existing PPOR - will become IP)
- Change loan to IO
- Change loan amount to $280,000 (current position)
- Ideally, fix low for 5 years (Who does IO fixed @ 5 years?)
- No need for offest, as we'll have that on land loan
- Presumably need to use up 10% ($28,000) of our current offset to avoid mortgage insurance
Land Loan (Future PPOR)
- P&I
- Fix low for 5 years
- 100% offset
- Use left over offset ($80,000 - $28,000 = $60,000) on land, therefore loan = around $140,000
Future Building Loan
- Start (or extend) a loan from the land loan
- use cash gained over next 5 years in offset as deposit
Another option...we don't buy land just yet...wait 5 years, and get a house and land package.
So please, any advice? What are the benefits of using different lenders across the loans? Should we use the same lender, or different?
Thank You
Chris
Could I please have some advice on structuring my loan? This will be my first IP.
Future Position:
- Looking to purhcase land in immediate future for around $200,000, which will then have a PPOR built in around 5 years time (obviously borrowing money for that - probably around $350,000)
- Current house is a PPOR which we plan to swap into an IP in around 5 years time
Current Position:
- $305,000 loan, paid down to $280,000 (Principal and Interest loan)
- $80,000 in offset account.
- PPOR bought for $325,000 in 2008, estimate current value at $350,000
- Additional cashflow of around $30,000 per year. Risk of reduction in pay (restructure at work), resulting in around $10,000 less. Wife has potential to either gain additional $30,000 p.a at the start of 2015, or stay on same rate (PHD student)
I welcome any advice with regards to loan structuring, however the following is what I was thinking.
House Loan (existing PPOR - will become IP)
- Change loan to IO
- Change loan amount to $280,000 (current position)
- Ideally, fix low for 5 years (Who does IO fixed @ 5 years?)
- No need for offest, as we'll have that on land loan
- Presumably need to use up 10% ($28,000) of our current offset to avoid mortgage insurance
Land Loan (Future PPOR)
- P&I
- Fix low for 5 years
- 100% offset
- Use left over offset ($80,000 - $28,000 = $60,000) on land, therefore loan = around $140,000
Future Building Loan
- Start (or extend) a loan from the land loan
- use cash gained over next 5 years in offset as deposit
Another option...we don't buy land just yet...wait 5 years, and get a house and land package.
So please, any advice? What are the benefits of using different lenders across the loans? Should we use the same lender, or different?
Thank You
Chris