Hello my fellow somersofters
I need some help clearing up my understanding.
When I was a young naive investor, I simply bought a property, waited for the equity to build up, then used the equity as security to purchase my next IP.
The NAB (who I have all my loans with) were more than happy to loan me money and secure all my IPs together.
Anyway, I now have four IPs, all securing each other. All of my loans are fixed bar one which I have an offset account linked.
There are actually two parts to my question here:
My plan to un-cross them all is to just wait until they get enough equity in themselves to secure each loan individually. Will this work? Is there a better way? Is there something really obvious I'm overlooking (most likely)?
The second part of my question relates to fixed vs variable loans. One of my big problems seems to be the "break" costs relating to my fixed loans. Do variable loans not suffer the same problem and/or work in the same way? If they don't, then why am I offered say a "three year variable rate loan" (sorry of some of that terminology is wrong)? If you can simply break a variable loan cost free, then why have it for say a three year period?
I'm sure the problem is my understanding of things, but that's why were are all here right! - to learn an help each other
I need some help clearing up my understanding.
When I was a young naive investor, I simply bought a property, waited for the equity to build up, then used the equity as security to purchase my next IP.
The NAB (who I have all my loans with) were more than happy to loan me money and secure all my IPs together.
Anyway, I now have four IPs, all securing each other. All of my loans are fixed bar one which I have an offset account linked.
There are actually two parts to my question here:
My plan to un-cross them all is to just wait until they get enough equity in themselves to secure each loan individually. Will this work? Is there a better way? Is there something really obvious I'm overlooking (most likely)?
The second part of my question relates to fixed vs variable loans. One of my big problems seems to be the "break" costs relating to my fixed loans. Do variable loans not suffer the same problem and/or work in the same way? If they don't, then why am I offered say a "three year variable rate loan" (sorry of some of that terminology is wrong)? If you can simply break a variable loan cost free, then why have it for say a three year period?
I'm sure the problem is my understanding of things, but that's why were are all here right! - to learn an help each other