hi there, How best to structure a loan? I have 3 loans two with Westpac both fixed loan p and I and 1 with AMP variable p and I. Do I funnel all money or most too the biggest one and minimum repayment to others? What is the normal process with this amount of loans? Matt
That's an open ended question with no context to your actual financial circumstances or needs. You should probably have gotten specific advice on this when the loans were set up. As a general suggestion, I'd say have an offset account, with all income coming there, then repayments for each loan get debited from that offset account. Given that you've only got one variable loan, the offset account probably needs to be set up against that loan (you can't have offset accounts against Westpac fixed loans). I can't say if that's ideal or not, but given the loan structure in place, that's about all you can do unless you break a fixed rate loan.
First check how much you can pay off a fixed loan. Last I had was $10,000 per year. Also, do you want to pay down the loans or offset them? Usually you would pay down the loan with the highest interest rate but that is only if you have no other debt.
Are they deductible/non-deductible IO/PI same borrowers? Use for same properties? all properties exact same owners? have offsets or not? Planning on changing loan use or not? such as moving into or out of a property planning to sell any assets which the loans were used to acquire?
I had similar questions and I’m still confused. The first broker stuffed me around so broker 2 sorted it out, however broker 2 now wants me to move my other loans to this bank as it will be a better set up. I’m just not sure if is, and they just want my business or they are trying to help me. I think I need to find a financial planner that specialises in property... but who to trust ?
Ask your broker what the benefits are. Then if you don't understand, ask for them to explain. Only move if it makes sense to you. It's your money. You benefit if things go well, and you suffer if they don't.
This trust thing is quite common, and actually debilitating I have found. We all have a barrow to push, even the " independent" paid by the hour planner and accountant will have issues of whats right and whats not, and that is evidenced by the joke that if you give 3 of them the same data you will get 4 diff outcomes................. The assumption is often made, that by an adviser not receiving a comm, but a client fee, that this removes bias. It doesnt, it can certainly minimise bias, but doesnt remove it. Just finding a planner that specialises in property ONLY I reckon would be hard.....................I cant see any PI provider or dealer group that would touch that sort of risk, in a sustainable way, especially given the recent messes with various groups. I feel Hobartchic has a good point.................. with clarity comes certainty. ta rolf
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