What to do?

Question. My partner and I have a PPOR that we owe $224,000 on and I estimate ( going on onther sales in the street) the house is now worth approx $330,000 giving us approx $106,000 equity. Our delemia is that we owe approx $26,000 in c/c's + a personal loan.

We would like to buy an IP so what sugg do u guys have with this situation. Should we refinance and payout c/c's/ personal loan + but a cheap IP .or
2. Should we sell house, pay debts +buy a new PPOR + IP ( depending on what our borrowing power is )??????

Just remember that option 2 involves the costs of selling and re-buying a PPOR. I would assume that this would be quite costly which may sway you back towards option 1.

I suppose it depends on how much of a hurry you are in ? Some of the lending gurus (like Rolf) in here should be able to help. Obviously, the lower the interest rate the better.

Just something to think about.

Hi Ben

Hmmm, yum, many options.

If your equity numbers are right and your serviceability is ok you can even at worst case refinance your home to 80 %.

This will give you 264 - 25 for cards - 224 owed.

Leaves 15 which isnt much, but could buy a 150 ish k IP if set up the right way depending on the state of purchase.

Further, if youre serviceability is very good, then you can refinance to 90 % while still retaining the credit card debt and then pay it out yourself. If you go to "refinance" cards then many Mortgage Insurers will limit the refinance to 85 % LVR.

This gives you 297 - 224 owed - 25 cards = 48 left over assuming you use a lender that will also lend you the LMI premium.

48 k can go a huge way.

Just some ideas, and I have no clue about your real situation so seek good financial structuring advice.