Advice on best way to fund/structure PPoR purchase

Discussion in 'Loans & Mortgage Brokers' started by rksing, 20th Dec, 2019.

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  1. rksing

    rksing Well-Known Member

    Joined:
    11th Apr, 2016
    Posts:
    73
    Location:
    NSW
    Hey everyone, so have been on PC and SS for awhile, but first thread I've started (happy for mods to move it if this isn't the right area). I am looking to get some advice on our below scenario.

    My wife and I (early 30s) have been rentvesting, but now have a young family (2 kids, more recent is 8 weeks old) and we want to look at purchasing a PPoR towards the middle to late 2020. Have been in touch with our broker to get an idea of our serviceability (this was before the interest rate cuts and assessment floor changes) and looked ok with non-banks and potentially with mid-tier lenders.

    We would be interested in advice from PC members on the best way (effective and most tax efficient) to fund the purchase/deposit for the PPoR purchase?

    Will start with some background info (IP values are from are from about 6 months ago):
    - Combined salary about 250k pa (exc super, bonuses, etc), wife currently on mat leave till mid 2020.
    - savings $130k probably wont be increasing whilst wife is on mat leave.
    - Share portfolio overall value of ~$500k. ~$230k net value (have a margin loan, which has about $110K which can be drawn out).
    - IP1 value $710k, loan $504k, rent $570pw
    - IP2 value 500k, loan $386k, rent $460pw
    - IP3 value $700, loan $560k, rent $540pw
    - IP4 value $210k, loan $165k, rent $265pw
    - IP5 value $840, loan $700k, rent $620pw

    We will be looking to refinance and extend out I/O periods on these loan early next year where possible, when some of the I/O periods expire start to expire.

    Will touch base again with our broker and accountant in the new year to work on the best way forward for financing a PPoR purchase, but wanted to see what insights the experts and experiences here could give.

    Thanks
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    35,860
    Location:
    Australia wide
    You would want to borrow 80% at least, perhaps 25% from loans secured on the investments - if possible.
    Keep cash in offset.

    Before that take tax and legal advice on spousal sales. Financial and tax advice on selling the shares and debt recycling. Tax advice on debt recycling generally with the investment loans.
    Tax advice on selling one or more properties. Credit advice on loan recycling etc
     
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    8,292
    Location:
    Gold Coast
    Active Debt Recycling may be a good start if you have the risk profile, many can get a 40 to 50 % " discount" on their loan payments over 30 years

    ta
    rolf