Redraw facility for PPOR

Discussion in 'Loans & Mortgage Brokers' started by MsSassy27, 17th Apr, 2020.

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  1. MsSassy27

    MsSassy27 Active Member

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    Hello! I am interested in your advice regarding redraw facility. I put my PPOR on the market last week. However, I have not received any offers on my property yet. My husband and I placed an offer on a property but were rejected because we included an clause that it is subject to the sale of my property.
    We have pre-approval with a bank for a certain amount but we will need additional funds to meet the purchase price.

    What are the pros and cons of considering using my property's (current PPOR) redraw facility for our joint property (future PPOR)? Unfortunately I am not eligible for "bridging loan" with the bank because my property is currently secured with a different bank.
    Many thanks in advance!
     
    MsSassy27, 17th Apr, 2020
    #1
  2. Terry_w

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

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    tax, legal and credit advice is needed if you want to dig deep.
     
    Terry_w, 17th Apr, 2020
    #2
  3. Jess Peletier

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

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    I agree with Terry - there may be ways you can get this done without bridging or 'subject to sale' .

    If you redraw your PPOR and use the funds for your new property, it might cause tax issues if you don't sell it and decide to rent it out, for eg.

    But these things can be worked out by your accountant. Or you can split the loan before you redraw to save yourself any potential future hassle.
     
    Jess Peletier, 17th Apr, 2020
    #3
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Bridge in these times

    Brave move

    ta

    rolf
     
    Rolf Latham, 17th Apr, 2020
    #4
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