Broker recommendation for debt recycling via shares

Discussion in 'Loans & Mortgage Brokers' started by BPhil, 21st Jan, 2020.

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  1. BPhil

    BPhil Well-Known Member

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    Location:
    Melbourne
    Can anyone make a recommendation? Located in Melbourne if that matters.

    I have been dealing with my regular brokers but they do not appear to understand these types of loans, they recommended BoM but we just had the application returned saying that they do not allow IO loans secured against a PPOR, they wanted a letter from a financial planner, and the broker messed up the servicing calcs.

    I would like to go through someone who knows how this stuff is supposed to work. Thanks :)
     
  2. Terry_w

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

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    Brokers can't advise on debt recycling per se because it is tax advice. They can advise on loan splits and lender choice etc. You should tell the broker what you need and get them to find a lender and product for you.
     
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    The dreaded draaagiiing

    Portfolio is an OK solution for an actice DR strategy but does demand the use of LOCs ( urghh).

    Suggest maybe give your existing broker another go and look at either AMP or Macq as best of breed options. Most brokers dont play in this specialist space unless they do a fair bit of work with a specialist DR planner. Its simple.................... but not obvious stuff.

    if cash out will be more than 100 k, and you dont have an existing equities portfolio, AMP will usually want the planners letter/SOA or an accountants letter for the lenders protection.

    Mac usually dont demand the same but have recently become a little tougher with cash out over 70 % LVR where your serviceability is a little tight

    Which is better ? Depends on various things like if you are valuation reliant, if your risk profile and tax position suits limit swapping from PI ( oo) to IO ( for recycled investment split), which you can only do with AMP.

    We tend to do more volume of Macq because of slightly higher servicing and most of our clients are middling tax position, not top tax bracket where AMP often come out in the modelling to the TO IO split recycling.

    Also suggest you seek specific tax, credit and perhaps planning advice because the above could all be very wrong for some client mixes.

    ta
    rolf
     
  4. JasonC

    JasonC Well-Known Member

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    Sydney
    BPhil,

    I have a AMP portfolio loan (with master limit) as Rolf mentions above. Can confirm it works well.

    Will send a PM with my broker details if you are looking for a change.

    Regards,

    Jason
     
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  5. Lindsay_W

    Lindsay_W Well-Known Member

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    Home - Debt Recycle
     
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