Confused with my recent purchased!

Discussion in 'Loans & Mortgage Brokers' started by Sheep112, 4th Jan, 2018.

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  1. Sheep112

    Sheep112 Well-Known Member

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    Hi all

    I would like some advice, I’m abit confused with my recent property purchased.

    I used a broker, I told him to take some money out of one of my investment property for a new purchase.

    I’m not sure what he did but I end up with 56k in my Suncorp everyday account, with another account owning 56k titled “ Personal Purpose Standard Variable Rate” on my banking app. 10 years term with 4.6% rate.

    I used this money to buy an investment property with a different bank.

    Few concerns:
    -What type of loan is this? Is this a top up? Or a personal loan?
    -I understand this loan is part of the new property for tax time, in this case can I refinance my Suncorp loan all together including this 10 years loan?
    - What is the best way to resolve this?

    This broker is the wife’s work boss...last time we will use him.

    Any comment is appreciated.

    Rich.
     
  2. Joynz

    Joynz Well-Known Member

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    Why not just ask the broker?
     
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  3. Sheep112

    Sheep112 Well-Known Member

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    He said it was a personal loan at the time, I don’t know why he did this but that is a very low rate for a personal loan?
     
  4. Owlet

    Owlet Well-Known Member

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    Unfair to blame the broker for your lack of understanding or clarifying what it is you asked them to do.
    At a rate of 4.6 - it doesn't sound like personal loan rate to me despite the title.
    You needed equity from a property to make another purchase. The broker enabled access to that equity via a loan and you recieved the cash. You used the cash to buy another property and now that 56k may be a deductible loan. I'm not sure what the issue is?
     
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  5. Trainee

    Trainee Well-Known Member

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    What did you sign? And did you read any of it?
     
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  6. Terry_w

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

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    Might be a home loan but the 10 year term sounds strange
    Yes, but should you?
    Ask the broker.
     
  7. Sheep112

    Sheep112 Well-Known Member

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    Hi guys

    Just to clear things up, I’m not blaming the broker. I was hoping there’s a way to resolve this so I could make another purchase in the future. A loan that amount for 10 years is not a great thing.

    Thank

    Rich.
     
  8. Joynz

    Joynz Well-Known Member

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    Also, just read the documents you signed - which will include the documents for the loan from the bank.

    They will spell out what kind of loan it is (but surely you know this as it isn't your first property. You did mention the equity was released from 'one of my investment property'.
     
  9. Terry_w

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

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    Won't be good for serviceability because the short term will mean high repayments.
    It won't be good from a tax point of view either as you would be debt recycling in reverse.
     
  10. Sheep112

    Sheep112 Well-Known Member

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    This is my first time taking money out to buy a property, so it’s fairly new to me. I had a read of the documents, it’s called a “Home Package Plus” with 120 months terms and offset account.

    Is it possible to combine these two loans but that would have tax complications.

    Regards

    Rich.
     
  11. Terry_w

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

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    Tax implications.
     
  12. Sheep112

    Sheep112 Well-Known Member

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    :p
     
  13. Watson1

    Watson1 Well-Known Member

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    Are you sure that it is not a 10 yr interest only loan as opposed to a 10 year term loan?
     
  14. Terry_w

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

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    This is what I thought, but I think suncorp have a max of 5 years IO.
     
  15. Sheep112

    Sheep112 Well-Known Member

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    Definitely interest and principle for 10 years term loan at 4.6%.
     
  16. Redom

    Redom Mortgage Broker Business Plus Member

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    10 year loan term does sound odd for a loan secured against property - not sure why that would be the case. The rate & loan name doesn't sound like a personal loan. Maybe check the security listed on the loan contract & ask the broker why its 10 years.
     
  17. Joynz

    Joynz Well-Known Member

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    The website says:

    Home Package Plus
    Save with our fully featured Home Package Plus. A package that combines your eligible home loan, transaction account and other Suncorp products in a single package for a low annual fee.

    Home Package Plus
     
  18. mikey7

    mikey7 Well-Known Member

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    Did the broker set up any other loans?

    When we did mine initially, I wasn't going to be getting an offset account, so we set up a separate loan that wasn't used - the money was there purely for emergencies.

    As I built up some redraw, I then used that account to fund my next deposit.

    Might be a similar situation being only 10 years on the loan?
     
  19. Owlet

    Owlet Well-Known Member

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    Blaming the broker was inferred from this comment.
     
  20. Simon Moore

    Simon Moore Residential & Commercial Mortgage Broker Business Member

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    This is 100% the broker fault, they are the professional in the relationship and should be ensuring their client has a full understanding of the products they are recommending.

    I'm going to guess that Suncorp would only allow a maximum 10-year term on the cash out. Suncorp can be funny with cash out for investment.
     
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