Financing Help

My friends asked me that they want to borrow for IP. They paid off their PPR but title is still with ANZ.

I gave them the steps:

1. Ask ANZ to provide them a LOC or equity loan from their PPR (their house is approx 1.2 to 1.4 mil)
2. Look for IP that they want to buy
3. Talk to a mortgage broker here for a loan and use 20 or 30% as deposit from ANZ loan

or

1. Talk to a mortgage broker and the loan is taken care of as above

Am I on the right track?

 

Send friend to the bank or a mortgage broker.
Marg

 

Better talk to a mortgage broker first. They could save a lot of money and hassles.

 

Much better off going straight to a broker - there are a lot more cost effective options with better structures for that scenario which could be 1-1.5%+ cheaper for the friend.

They will be able to weigh up the existing lender option vs alternatives and how that relates to their longer term goals.

Marginal convenience gain for the first step at the expense of the next 30 years of finance isn't a great trade off - get it right from the start.

 

You're pretty much right OP

Release enough equity in the PPOR to cover the deposit/costs on the IP and then set up another loan against the IP.

Is your friend planning on purchasing more than one IP? If so - it might be worthwhile releasing a larger chunk of equity against the PPOR.

Having said that - lender selection is important because not all banks are keen on large cash outs at the moment.

I know I'm biased but best bet is for them to chat with an investment focused broker that does this stuff every day - plenty on here.

Cheers

Jamie

 

I just got 610k equity out with St George on a one year tax year. Maybe throw them in the mix when you speak with your broker.

 

Thanks all. Will forward a few PC broker names to them.