Planning a 3rd purchase and finance

Discussion in 'Loans & Mortgage Brokers' started by Jman123, 16th Apr, 2022.

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  1. Jman123

    Jman123 New Member

    Joined:
    16th Apr, 2022
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    Location:
    Cessnock
    Hi guys,
    First time poster after doing heaps of reading on here over time.
    I am just after some thoughts or ideas on how to structure a third purchase.

    We currently have a ppor worth around $650k. It’s current mortgage is approx. $315k and we have lived in it for more then 12 months.

    We also have an IO loan attached to our ppor which was used to purchase our IP paying the deposit and stamp duty which is approx. $140k.

    In addition to this debt we also owe approx. $315k on this IP and it’s worth around $700k.

    We are currently looking at upgrading our ppor and potentially turning our current ppor into an IP. assuming our servicing allows this how would you try to achieve this?

    would you aim to pay cash for the deposit of the upgraded ppor or use equity to achieve this?
     
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    14th Jun, 2015
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    Location:
    Gold Coast (Australia Wide)
    Sounds like u have the cash to make the purchase happen ?

    Whats the chance that this new PPOR will also become an IP in the middle to long term future ?

    If serviceability allows and your val position numbers are right, you can pull around 65 k from the PPOR and 245 from the IP, so 300 k all up for deposit and costs.

    This may allow you to borrow 105 % of the purchase price, so if you ever rent out the new PPOR, then you have max tax deductability. Park spare cash in the offset for the new loans.

    If the new PPOR is not likely to become an IP, you can still use the above structure, but there is no need to unless you wanted to look at an active debt recycle strategy where the extra cash can supercharge such a strategy subject to your risk profile

    ta
    rolf
     
    craigc likes this.
  3. Terry_w

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

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    I would port security of the split used for the IP to the Ip and then borrow the deposit secured by the main residence and borrow 105% for the me main residence
     
  4. Tony Xia

    Tony Xia Structured Loan Advisor Business Member

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    23rd Aug, 2015
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    Location:
    Bella Vista
    1 - consolidate all the loans used for that investment loan into 1 and against that property since the val has increases.

    2 - restructure your existing PPOR to INV IO, draw out another loan split as OO- against current PPOR property

    3 - get pre approval against new property for the other 80%.

    Use equity as much as you can and park your cash on the offset account.
     
  5. HonestShiba

    HonestShiba Well-Known Member

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    17th May, 2020
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    Location:
    VIC
    Quite a lot of equity in the IP.

    Perhaps there is way to do this without touching the PPOR loan (i.e. restructuring existing PPOR to INV IO) and keeping the lower PPOR rate instead of an INV interest rate? If cashflow and circumstances allow?