Redraw facility on ppor but what to do to buy I.p?

[jpr777]

Hi all, so after meeting the mortgage broker to look at our finance for buying an I.p,
Our current ppor is a basic variable loan with a full redraw facility no fees, and nearly paid off.
So we want to purchase our next property to move into with an intention of only being there for 2-4years.
Have not made much at all prob cut even after a sale on our ppor,
Questions are.
If we were to sell ppor or keep it what should we do with a loan structures?
I've been given to much different advice, split loans, combined loans etc.
Please help.
Thankyou

 

[Rolf Latham]

Hi all, so after meeting the mortgage broker to look at our finance for buying an I.p,
Our current ppor is a basic variable loan with a full redraw facility no fees, and nearly paid off.
So we want to purchase our next property to move into with an intention of only being there for 2-4years.
Have not made much at all prob cut even after a sale on our ppor,
Questions are.
If we were to sell ppor or keep it what should we do with a loan structures?
I've been given to much different advice, split loans, combined loans etc.
Please help.
Thankyou

I think the first thing to do is work out what YOU want to do,and then build a finance structure around it.

The conflicting and confusing advice you have received to date may simply be due to the fact that you can yet provide a specific brief to your banker/broker.

What will u do with the new property after the 2 to 4 years ?

ta

rolf

 

[jpr777]

Oh yes I did not put it in, we would be turning the second house into an investment and more than likely selling the poor we are in now.

 

[john@commercial]

So what are you looking for? If you just want a loan for the IP, use some of your redraw as the deposit, seems easy to me, just use a different lender so they don't get confused.

 

[Rolf Latham]

So what are you looking for? If you just want a loan for the IP, use some of your redraw as the deposit,]

You would not have a concern about the mixing of deductible vs non deductible debt ?

ta
rolf

 

[Shaneelastic]

So what are you looking for? If you just want a loan for the IP, use some of your redraw as the deposit, seems easy to me, just use a different lender so they don't get confused. Call to discuss on 0412 511 380
Contact me on [email protected]

Brother, wouldn't a 20 % loc against ppor and 80 % against UPS be better, for someone touting for business, your off the Mark, see ya later friend

 

[Rixter]

JP, me thinks its maybe astute to apply some commercial shark repellant.

 

[jpr777]

We will be selling our ppor, buying our second ppor. And then an I.p using equity,
I'm thinking using a line of credit I.o loan for our second ppor as we will not be in it for longer than 4 years.
To my understanding I do not want to use cash to buy I.p as I want this for future ppor that we will stay in.
I'm just not sure as yet how to go about the plan of purchase for the next house wether we use the current ppor before we sell it to buy the next one, then sell it put cash into offset and then purchase I.p through equity.
This would be good for us so we don't get stuck without a roof over our heads.
Is there a better way to do this? I have to look forward 6 yrs.

 

[Jamie M]

Hi there

You need tread carefully here and set this up correctly from the start.

If the next PPoR will become an IP later on, it's ideal to set this up with an IO loan now (with offset attached) and avoid paying down any of the principle (park spare cash in the offset instead) as this debt will become deductible in the future.

Your right about not using your own cash for the IP. Borrowed funds will be tax deductible.

You also want to avoid crossing your PPOR with your IP.

You really need to speak with a decent broker/banker - Rolf above has the runs on the board.

Cheers

Jamie

 

[Domma35]

Hi there

You need tread carefully here and set this up correctly from the start.

If the next PPoR will become an IP later on, it's ideal to set this up with an IO loan now (with offset attached) and avoid paying down any of the principle (park spare cash in the offset instead) as this debt will become deductible in the future.

Your right about not using your own cash for the IP. Borrowed funds will be tax deductible.

You also want to avoid crossing your PPOR with your IP.

You really need to speak with a decent broker/banker - Rolf above has the runs on the board.

Cheers

Jamie

G'day Jamie. Do you recommend not mixing your PPOR with an IP purely because it gets hard or messy to work out the deductible vs non-deductible portions? Or is there other reasons?

 

[john@commercial]

Hey I agree with Rolf, Jamie & Domma
Of course this is to keep the assets un-crossed & easily identify the tax deductible debt, sure it should be i/o if it will be IP, of course you should avoid paying down any of the principle (park spare cash in the offset instead) as this debt will become deductible in the future.
Seems I should have spelt it all out, I just thought all that was common knowledge
Cheers

 

[Brady]

Hey I agree with Rolf, Jamie & Domma
Of course this is to keep the assets un-crossed & easily identify the tax deductible debt, sure it should be i/o if it will be IP, of course you should avoid paying down any of the principle (park spare cash in the offset instead) as this debt will become deductible in the future.
Seems I should have spelt it all out, I just thought all that was common knowledge
Cheers

cross collateralised debt doesnt make it an harder to identify tax deductions, its all the purpose

Personally I have no issue cross collateralising, others do.

If it was common knowledge then im sure OP wouldnt of created a thread to ensure was set up correctly.

 

[Terry_w]

Future plans change so i think it would be a good idea to set things up assuming you may keep both houses.

I suggest getting a separate split as a loc on existing house and use this for deposit for the new one which should have a io loan not a loc.

becareful of the way you transfer money and pay for things for the new one too- no transferring funds to a savings account.

 

[jpr777]

Meetings and advice

So I went to an accountant and he suggested selling the current ppor after the purchase of the new ppor because of the reasons that 300k in an offset account at 6% I.rate is a better saving on the new ppor than keeping current ppor, paying tax and having hardly any offset against a 600k loan.
That's understandable.
But he never gave me any options on how to effectively keep the current ppor, (if effective)even after asking him.
I took my strategic plan to him and he wasn't interested. My broker has been a great help and this online forum also.
As I am new and nieve to all of this can someone suggest who should I take my startegic plan to. I have a plan, It needs reviewing with a plan a and b and figures.
Any suggestions?
Thankyou