From: Felicity W.
Hi all
I've had a search of the archives, but still haven't come up with an answer for the following.
Say you start off with a home and an IP, both worth $100k and with finance to 80% (I'm missing out costs etc in this example, to simplify!).
So you would have:
Home - value 100k, loan 60k
IP1 - value 100k, loan 100k
Then down the track the houses have gone up in value, so now it's
Home - value 150k, loan 60k
IP1 - value 150k, loan 100k
Now it's time to buy another IP, also valued at 150k. At 80% that means a total of 360k borrowings.
My question is - how can that loan be split?
does it have to be:
Home - value 150k, loan 110k
IP1 - value 150k, loan 100k
IP2 - value 150k, loan 150k
ie put all the extra borrowings against the home Line of credit/loan
or can it be
Home - value 150k, loan 60k
IP1 - value 150k, loan 150k
IP2 - value 150k, loan 150k
ie split the loan to maximise tax advantages.
I know this is cross collateralising which isn't always the best option, but it's a question that has bugged me for a while!
Keep smiling
Felicity
Hi all
I've had a search of the archives, but still haven't come up with an answer for the following.
Say you start off with a home and an IP, both worth $100k and with finance to 80% (I'm missing out costs etc in this example, to simplify!).
So you would have:
Home - value 100k, loan 60k
IP1 - value 100k, loan 100k
Then down the track the houses have gone up in value, so now it's
Home - value 150k, loan 60k
IP1 - value 150k, loan 100k
Now it's time to buy another IP, also valued at 150k. At 80% that means a total of 360k borrowings.
My question is - how can that loan be split?
does it have to be:
Home - value 150k, loan 110k
IP1 - value 150k, loan 100k
IP2 - value 150k, loan 150k
ie put all the extra borrowings against the home Line of credit/loan
or can it be
Home - value 150k, loan 60k
IP1 - value 150k, loan 150k
IP2 - value 150k, loan 150k
ie split the loan to maximise tax advantages.
I know this is cross collateralising which isn't always the best option, but it's a question that has bugged me for a while!
Keep smiling
Felicity
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