Newbie questions re deposit & finance

Discussion in 'Loans & Mortgage Brokers' started by Lee123, 30th May, 2017.

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  1. Lee123

    Lee123 New Member

    Joined:
    30th May, 2017
    Posts:
    4
    Location:
    Adelaide
    Hello

    We are in the process of buying our first investment property. This is such a basic question and I'm embarrassed to ask it but if our contract is subject to finance and we can't get finance do we lose our deposit?

    Also wondering are there any reasons why using our redraw on our ppor as the deposit on the new ip is a bad idea?

    Thank you :)
     
    Lee123, 30th May, 2017
    #1
  2. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

    Joined:
    18th Jun, 2015
    Posts:
    6,685
    Location:
    Perth WA + Buderim Qld
    Hi Lee,

    Welcome to the forums.

    Redrawing your PPOR is fine if it's done properly - you need to create a new loan split to reflect the deposit for the IP. This keeps it all nice and neat for your accountant and the ATO if they ever come knocking.

    If you can't get finance, you won't lose your deposit as long as you have the clause there.
     
    Jess Peletier, 30th May, 2017
    #2
  3. Terry_w

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

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    Terry_w, 30th May, 2017
    #3
  4. Lee123

    Lee123 New Member

    Joined:
    30th May, 2017
    Posts:
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    Location:
    Adelaide
    Thank you for your assistance Terry & Jess that helps a lot :)
     
    Lee123, 30th May, 2017
    #4
    Terry_w likes this.