Looking to buy first IP : Use savings OR pay PPOR and apply equity ?

Discussion in 'Loans & Mortgage Brokers' started by MPL, 18th Jan, 2022.

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  1. MPL

    MPL Member

    Joined:
    18th Jan, 2022
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    First time post.
    Hello members,
    I currently have PPOR home loan with redraw facility. And have enough savings here for 20% deposit.

    My question is, should I reduce my home loan by paying with redraw savings and apply for equity extraction ? if so don't you think banks will understand that by seeing statements ?
     
    MPL, 18th Jan, 2022
    #1
  2. Terry_w

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

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    Split the loan and redraw borrowing 105% for the IP - is generally how you would want to do it. More tax effective
     
    Terry_w, 18th Jan, 2022
    #2
    craigc, MPL and Morgs like this.
  3. Morgs

    Morgs Well-Known Member Business Member

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    Location:
    Sydney NSW
    As Terry has outlined best to look at this structure if possible - only additional consideration I'd add into the structure would be as to if the owner occupier is going to be a future investment property as well.
     
    Morgs, 18th Jan, 2022
    #3
    Arthurark and MPL like this.
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