question about loan top up

Discussion in 'Loans & Mortgage Brokers' started by igor1234, 23rd Apr, 2020.

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  1. igor1234

    igor1234 Well-Known Member

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    Hello friends,

    quick question about loan top up as i am getting mixed messages from the lander (bank),
    My loan on my PPOR is ~ 60% and i want to increase it to 80%, same P&I. My current repayment is let say $3000 per month that didnt change from the original borrowing of 80% (i.e. just fluctuated with the changing interest rates.
    Will the bank just add the extra $ into the same loan account for me to use under same repayment with a new 30 year term, or will that be a separate loan and the repayment $ will increase? do i have a say here or its a standard procedure?

    thanks!
     
    igor1234, 23rd Apr, 2020
    #1
  2. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    What is the purpose of the 20% equity cash out?
     
    Property Twins, 23rd Apr, 2020
    #2
  3. Morgs

    Morgs Well-Known Member Business Member

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    Differs by lender... different options, processes & requirements/qualification
     
    Morgs, 23rd Apr, 2020
    #3
  4. igor1234

    igor1234 Well-Known Member

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    the goal is deposit for new purchase.
    Thank you
     
    igor1234, 23rd Apr, 2020
    #4
  5. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    Best to get specific advice from an investment savvy broker so you structure the loans in the most optimal way in line with your goals.
     
    Property Twins, 23rd Apr, 2020
    #5
  6. Terry_w

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

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    Sometimes the wording people use makes them confused.

    You wouldn't want to 'top up' a loan, but borrow against the main residence to invest, under a new loan split.
    There are tax considerations too as to where the borrowed funds are deposited too. Put in the wrong place and the loan interest will not be deductible so you need a broker and also get some tax advice as well. There is a post on here this morning where the borrower stuffed things up and lost the deductions.
     
    Terry_w, 24th Apr, 2020
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  7. Lindsay_W

    Lindsay_W Well-Known Member

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    If you use a broker you'll have a say, going direct who knows, they may want you to cross the securities etc.
    Plenty of good brokers on this forum, even if they don't advertise themselves as 'investment savvy'
     
    Lindsay_W, 24th Apr, 2020
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  8. Kremitz

    Kremitz Active Member

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    Where should this be placed then?

    We might be in the same boat as the OP as we are looking at refinancing to get some equity to be used as part of deposit of IP.
     
    Kremitz, 26th Apr, 2020
    #8
  9. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Not advice as Im not a tax guy

    Separate loan split with an attached CLEAN offset.

    Best practice is a small LOC that you can vary the limit of against you other SVR loans, espcially in the DR space. Products like STG portfolio can be good, BUT are not suitable for long term resilient debt

    Recently have had to turn away clients that arent " teachable" where the pork barrel lender rebates are of greater perceived value than the capacity to DR properly.

    Get 4 k, lose 10s to 100s of thousands over time.

    Loans aint loans

    ta
    rolf
     
    Rolf Latham, 26th Apr, 2020
    #9
  10. MC1

    MC1 Well-Known Member

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    What is an investment savvy broker out of curiosity?
     
    MC1, 26th Apr, 2020
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  11. Kremitz

    Kremitz Active Member

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    thanks Rolf for the tips.

    What is SVR and DR?
     
    Kremitz, 26th Apr, 2020
    #11
  12. Terry_w

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

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    You can out it anywhere but make sure you get tax advice before using it. See my tax tip 1
     
    Terry_w, 26th Apr, 2020
    #12
  13. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    SOZZ

    Industry Jargon for Standard Variable and Active Debt Recycling

    ta
    rolf
     
    Rolf Latham, 26th Apr, 2020
    #13
  14. Kremitz

    Kremitz Active Member

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    Thanks Terry and Rolf
     
    Kremitz, 26th Apr, 2020
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