Loan Structure

Hi All,

Have a few questions need to be answered by someone who have been in a similar situation.

Basically I have 1 IP and 1 PPOR and am looking at buying another PPOR and making the current one an IP. With my PPOR I currently have $60k in equity and personally I would like to draw this equity out and use this as deposit and renovation money for the next PPOR.

I have contacted my Lender (CBA) and the lender asked me why i want to do a top up and then borrow again why not just use the equity to borrow instead of two steps process.

My understanding is there are some benefit of doing top up instead of straight borrow against the equity. Could someone please guide me on which path to take?

And do i need to do anything if i want to make the current PPOR to become an IP? also should i just buy the next PPOR as IP?

Thanks for any help!
Tony
 
Hi All,

Have a few questions need to be answered by someone who have been in a similar situation.

Basically I have 1 IP and 1 PPOR and am looking at buying another PPOR and making the current one an IP. With my PPOR I currently have $60k in equity and personally I would like to draw this equity out and use this as deposit and renovation money for the next PPOR.

I have contacted my Lender (CBA) and the lender asked me why i want to do a top up and then borrow again why not just use the equity to borrow instead of two steps process.

My understanding is there are some benefit of doing top up instead of straight borrow against the equity. Could someone please guide me on which path to take?

And do i need to do anything if i want to make the current PPOR to become an IP? also should i just buy the next PPOR as IP?

Thanks for any help!
Tony

Seperate loan for the deposit and reno's as the purpose will be for PNL purposes. The existing loan will relate to the (soon to be) IP and the interest will become deductable.

You'll need to get a valuation (RE estimate in writing should do i believe) on the existing PPOR as you'll need a base figure to work off for CG. also have a depreciation schedule done on it.

I would suggest finding a decent MB to ensure the structure is correct instead of speaking to the monkey at the CBA.


Regards
Steve
 
You mean an inexperienced Human dont you steve Steve :) rather than monkey, for a trained monkey knows why uncrossed is usually better

ta
rolf
 
Thanks guys!

The reason i'm still using the lender at CBA is she is actually a close friend :D however she has no investment knowledge at all but she does know her product inside out and and very quick in processing what i need, at the end it is a stress free process doing it with her.

I did go to a local mortgage broker, he asked me why i want to invest in property why not just concentrate on paying down my mortgage. Obviously i walked out after 15min.. its like chicken talking to duck.

Rolf and Steve you guys dont base in sydney right? I wouldn't mind go have a chat with someone who know what i'm talking about.
 
Thanks guys!

The reason i'm still using the lender at CBA is she is actually a close friend :D however she has no investment knowledge at all but she does know her product inside out and and very quick in processing what i need, at the end it is a stress free process doing it with her.

I did go to a local mortgage broker, he asked me why i want to invest in property why not just concentrate on paying down my mortgage. Obviously i walked out after 15min.. its like chicken talking to duck.

Rolf and Steve you guys dont base in sydney right? I wouldn't mind go have a chat with someone who know what i'm talking about.

Hi anguang

I don't mean any disrespect to your friend, but I would bet she is not an investor either and wouldn't know what the implications of tangling you up in X-Coll could mean to you?

Give Rolf or Steve a call.

Regards JO
 
Hi anguang

I don't mean any disrespect to your friend, but I would bet she is not an investor either and wouldn't know what the implications of tangling you up in X-Coll could mean to you?

Give Rolf or Steve a call.

Regards JO

Thanks Jo, you are right, she has no investment knowledge at all which is why i started my search for a broker who know what i want.

i will definately give rolf and steve a call.
 
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