Hi All,
I have problem with using equity in my PPOR to use to invest in IP's. Do you?
Gordon
I have problem with using equity in my PPOR to use to invest in IP's. Do you?
Gordon
Using PPOR equity
- Thread starter Gordon Gekko
- Start date
Hi GG,
You should have a read of LucasK's thread of 'What is a Caveat?'
This is what the lender will put on your PPOR if you default on your ip committments.
May as well get a mortgage and use the equity in the PPOR in the first place.
Rules may change if you ip's are purchased through a Company.
Cheers Brenda
You should have a read of LucasK's thread of 'What is a Caveat?'
This is what the lender will put on your PPOR if you default on your ip committments.
May as well get a mortgage and use the equity in the PPOR in the first place.
Rules may change if you ip's are purchased through a Company.
Cheers Brenda
Sim
Administrator
Stay away from cross collateralisation (use independent stand-alone LOCs instead) and you can avoid most of your problems.
Spread your finance around with multiple lenders will avoid a few more.
If you get to the point where you are going to default on your IP loans, you need to look really hard at what you are doing - perhaps you can't actually afford that PPOR ? It might be time to start selling assets before they get taken away from you - that way you still maintain control.
Spread your finance around with multiple lenders will avoid a few more.
If you get to the point where you are going to default on your IP loans, you need to look really hard at what you are doing - perhaps you can't actually afford that PPOR ? It might be time to start selling assets before they get taken away from you - that way you still maintain control.
I agree Sim, if you get to a point where you are going to default on your IP loans what are you doing with IP's in the first place ?
Defaulting on loans aint putting you in a good position for the future. I have no probs using PPOR equity for IP purchases as my purchases are never going to pose a threat to my PPOR. If you are buying right the point is moot.
astroboy
but why ?
if you default on your IP loans and banks dont hold your PPOR of security they will just sue you for the amount anyhow
if your amount of debt is the same .. (using PPOR and not using PPOR) then I cant think of a reason....
the reason Im asking is perhaps there is a reason that I havent taken into account ?
With All of the loans that we've got, we've had to sign a personal guarantee , so unless you have you're PPOR in a trust ( and as a result should be paying FBT to live there ) they're going to get it anyway , if you stuff up big time.
All of our equity was in our PPOR , so if we wanted to buy IP's we needed to access that equity. We're probably at the point where we could refinance our IP's so we could pay back our LOC.... but we won't . We're off to buy more .
Avoiding cross collateralisation limits the ability of the banks to do nasty things , as does having your loans with different banks.
The only time I'm aware that Cross collateralisation makes sense , is if you have cheapies that have gone up in value , and instead of getting a LOC to with draw a relatively small amount to fund another purchase , you could make a case for cross collateralising your current cheapie with another similar IP.
see change
All of our equity was in our PPOR , so if we wanted to buy IP's we needed to access that equity. We're probably at the point where we could refinance our IP's so we could pay back our LOC.... but we won't . We're off to buy more .
Avoiding cross collateralisation limits the ability of the banks to do nasty things , as does having your loans with different banks.
The only time I'm aware that Cross collateralisation makes sense , is if you have cheapies that have gone up in value , and instead of getting a LOC to with draw a relatively small amount to fund another purchase , you could make a case for cross collateralising your current cheapie with another similar IP.
see change
