Pros and Cons of a LOC

[25North]

Hi all,
Sometimes complicated world this property investment.
We have a LOC with seperate lines for our 3 IP's. Our simple understanding is to head to the bank shortly, re value and increase the credit limit for another purchase. More simple understanding - should we stay within our 20 equity / 80 loan ratio - can we not continue indefinately ( serviceability aside )??
The fact that we are with one lender, considering the above - would not hinder our process??

 

[Peter_Tersteeg]

Investigate if a LOC is the most appropriate type of loan. It's working for you, but most LOCs have a slightly higher rate than a regular loan with a redraw facility. There may be a cheaper alternative.

You might want to consider putting the next purchase with a different lender. There are advantages in negotiating a bulk discount by putting all your properties with one lender, but you may also be sacrificing some future flexibility by doing this.

 

[25North]

Thanks Peter, now I move categories to investigate Trust's.