Buying a property to live in with a view to it becoming an investment in a few years so we want to maximise flexibility and tax effectiveness down the track.
Property is slightly outside the affordability of partner A by 120k in terms of repayments with the maximum bank LVR (without LMI). Both partners will have salaries in the future. Loans will be IO with offset.
The options:
1. Joint mortgage with Partner B to extend the serviceability on this particular deal. Positive: Straightforward, Downside: Reduces future serviceability for Partner B
2. Throw the additional 120k as a deposit. Downside: Unable to move this equity to a new PPOR in the future and the interest won?t be tax deductible. (not well worded but I think we all get the idea)
3. Partner B Lends Partner A the additional 120k to use as a deposit. Maximum loan Interest will be tax deductible if this were to be an investment in the future. Partner B loan could be refinanced if future circumstances change (e.g Salary rise etc)
Option 3 seems to be the most suitable but may be overthinking this ? advice and gotcha?s welcome?
Property is slightly outside the affordability of partner A by 120k in terms of repayments with the maximum bank LVR (without LMI). Both partners will have salaries in the future. Loans will be IO with offset.
The options:
1. Joint mortgage with Partner B to extend the serviceability on this particular deal. Positive: Straightforward, Downside: Reduces future serviceability for Partner B
2. Throw the additional 120k as a deposit. Downside: Unable to move this equity to a new PPOR in the future and the interest won?t be tax deductible. (not well worded but I think we all get the idea)
3. Partner B Lends Partner A the additional 120k to use as a deposit. Maximum loan Interest will be tax deductible if this were to be an investment in the future. Partner B loan could be refinanced if future circumstances change (e.g Salary rise etc)
Option 3 seems to be the most suitable but may be overthinking this ? advice and gotcha?s welcome?