Is this Possible?

Discussion in 'Loans & Mortgage Brokers' started by Chase71, 15th Nov, 2019.

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  1. Chase71

    Chase71 Well-Known Member

    Joined:
    5th Jan, 2018
    Posts:
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    Location:
    Under Your Bed
    Hello

    I am after some general advice to see if this is possible. I am trying to research what my best options are before engaging a financial planner.

    Person A (Myself)

    IP Property worth (700K)

    Loan P&I 350K Variable (200K in Offset)

    Loan P&I 200K Fixed 4.07% (21/2 years left)


    Person B (My Partner)

    PPOR Worth 650K

    Loan 350K


    Person A&B want to buy a PPOR together 1200K (600K Each)

    Due to Mix family’s, assets want to be kept separate and debt separate.

    New Loan Structure CBA Property Share Loan.


    Person A: 180K Taxable Income

    Person B: 240k Taxable Income

    Question

    Person B wants to turn current PPOR into an investment property.

    Can person A&B individually pull all equity out of their investment properties to reduce new PPOR loan (600K each) and use the new PPOR as guarantor. This is also to reduce taxable income of persons A&B


    Final Outcome

    Person A: IP Loan 700K

    PPOR Loan 250K

    Person B: New IP Loan 650K

    PPOR Loan 300K

    Hope this makes sense.
    Any help is greatly Appreciated
     

    Attached Files:

  2. Terry_w

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

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    If you borrow against the current property and use it for the new property the interest would not be deductible. Use is private.
     
    Redwing and Eric Wu like this.
  3. Jess Peletier

    Jess Peletier Mortgages, Finance & Property Strategy Aust Wide Business Member

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    Location:
    Perth WA
    You can certainly use your own properties as security for the new PPOR loans, but as Terry said the interest would not be deductible. You'd also need to borrow on your own, and would then have no need for the property share product, assuming you have enough equity to cover the whole sum.

    The new PPOR would then be unencumbered.
     
  4. Chase71

    Chase71 Well-Known Member

    Joined:
    5th Jan, 2018
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    Location:
    Under Your Bed
    Thanks For the feedback.
    Appologies if I have this wrong.
    So i'm now thinking

    Person A: Pull 200K from offset account and use it for PPOR

    Final Outcome

    Person A: IP Loan 550K

    PPOR Loan 400K

    Person B:

    Convert current PPOR to IP

    IP Loan 350K

    PPOR Loan 600K


    Person B may be better off selling Current PPOR and only having a 300K Loan on new PPOR.

    Thanks for the feedback at least I have a better ideal when talking to my financial planner.
     

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