Multiple Loans What is my best option for paying down

[brocky05]

Hi Everyone

I currently have an investment property I owe $140,000 which im about to change to Interest only payments.

I have just bought a block of land for $171,000 and have taken out 2 loans one of $76,000 the other $99,000.

Im also planning on adding a construction loan of $280,000 to the 76,000 loan.

what is my best option am I better off just paying interest only on the $76,000 and $99,000 loan having all my money pured into an offset account.

Or would I be better off paying of the $76,000 loan which I could nearly do in a year if I paid my other loan interest only?

Whats the advantages/disadvantages of each the new loans are for my PPOR. I think I will be happy with this although I would like to buy a cheap unit soon under $200,000 whats the best way to go to acheive my goals sooner.

Big shout out to Brady on this forum who has offered me awesome advice and has helped me along the way. Would definitely recommend him to anyone looking to get a loan with the CBA. His professionalism and knowledge is outstanding.


Thanks

 

[Jamie M]

Brady is a good dude.

Do you think you may ever rent out your new PPOR in the future?

Cheers

Jamie

 

[brocky05]

Brady is a good dude.

Do you think you may ever rent out your new PPOR in the future?

Cheers

Jamie

I font think so but if I fall into a bad place it could be possible.

 

[Jamie M]

In that case perhaps look at setting all loans up as IO and have an offset linked to a variable loan against your PPOR. Put all your spare cash in the offset instead.

Brady will give you the low down on this structure.

Cheers

Jamie

 

[Redom]

In that case perhaps look at setting all loans up as IO and have an offset linked to a variable loan against your PPOR. Put all your spare cash in the offset instead.

Brady will give you the low down on this structure.

Cheers

Jamie

Good advice - best to set it up as IO with an offset if there is a chance that it'll turn into an IP down the track.

Reasons are that it gives you access to your cash when required (flexibility) and has potential tax advantages. Regarding the tax advantages, if it turns into an IP, you'll still have a large principal balance - and the interest deductions on this large balance will deductible.

You can then use whatever offset savings you accumulate to purchase your future PPOR. What you're effectively doing is maximising your deductible debt.

Also good to hear a shout out for Brady. I've met a fair share of pretty uneducated lender reps (same goes for brokers) but Brady's posting indicates he's very savvy.

Cheers,
Redom