Hello fellow Somersoftians!
In preparation for purchasing IP#1, I have been talking to brokers about how to set the finance up. The structure is fairly important as we plan to keep buying IPs as long as our serviceability will allow (plan: 2 IPs this year, 2 next year).
We have a PPOR IO loan. PPOR is worth $600k and the IO loan is $450k.
We have an attached offset account to the PPOR loan with enough money for the deposit for IP #1. I thought the usual way to buy an IP was to use the money in the offset as a deposit for the IP.
However I've just learnt of another method which confuses me somewhat and would like to hear people's opinions on it.
1. Deposit money into the PPOR loan and top it up.
2. Redraw this and use it as funds for IP #1.
The reason this confuses me is because I thought redrawing money should be avoided (which is why we have an offset facility instead of a redraw facility).
Any thoughts? Would really appreciate any help.
Cheers
In preparation for purchasing IP#1, I have been talking to brokers about how to set the finance up. The structure is fairly important as we plan to keep buying IPs as long as our serviceability will allow (plan: 2 IPs this year, 2 next year).
We have a PPOR IO loan. PPOR is worth $600k and the IO loan is $450k.
We have an attached offset account to the PPOR loan with enough money for the deposit for IP #1. I thought the usual way to buy an IP was to use the money in the offset as a deposit for the IP.
However I've just learnt of another method which confuses me somewhat and would like to hear people's opinions on it.
1. Deposit money into the PPOR loan and top it up.
2. Redraw this and use it as funds for IP #1.
The reason this confuses me is because I thought redrawing money should be avoided (which is why we have an offset facility instead of a redraw facility).
Any thoughts? Would really appreciate any help.
Cheers