Hi, I currently have two investment properties and hope to buy my own home in the next few years. It will be tight to get lending....very tight. So my question is.... does it look better on paper if both of my properties are below 80% LVR? One property I could refinance to 78% (currently at 70%LVR).. and use that surplus to put on my other property making that LVR 78% (currently at 86%) On paper does it look any better? I appreciate overall debt remains the same... Would it also look better on paper if I switch the properties to PI? We could handle the increase cash flow. We have cash for a 20% deposit for our own home purchase if it ever happens... (fingers crossed lending relaxes a little..) Appreciate your thoughts. Yes I have spoken to a few mortgage brokers and they are reluctant to commit to an answer thats projected for the future (as who knows whats going to happen over the next few years) and I appreciate that... I'm just trying to formulate a plan... Thanks!
When you say look better on paper, who are you making it look favourable to? Based on what you are saying - reshuffling the debt doesn't seem to have any benefits. You will however loose the LMI you have paid if you did what you are proposing to do. If the goal is to purchase a future home in the coming years, it makes sense to keep Interest Only, build up cash savings rather than paying off an investment property (will be ineffective from a tax deductibility perspective). Note: this is not advice you may want to speak with a tax accountant
Thanks for you reply. Ok so just need to save save save. It will be tight because we don’t earn enough. Thanks guys!!
