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Refinancing considerations

Discussion in 'Property Finance' started by Keen novice, 28th Mar, 2016.

  1. Keen novice

    Keen novice Member

    Joined:
    15th Feb, 2016
    Posts:
    16
    Location:
    nsw
    Evening All,
    I'm just about to refinance a loan.. the property was our PPOR but is an IP at the moment because of a work transfer. We will more than likely be moving back into it within 6mths -2 years. I was hoping to access the equity in it to buy an IP soonish and I don't want my loan set up to hinder this plan. Any advice before I lock anything in?
     
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,161
    Location:
    Gold Coast
    Not much info...........

    Typically,if one has marginal equity look for the highest valuation to refinance to.

    Go for 2 loan splits

    the current loan amount,and the new loan for the Ip(s) and costs

    ta
    rolf
     
  3. Keen novice

    Keen novice Member

    Joined:
    15th Feb, 2016
    Posts:
    16
    Location:
    nsw
    Thanks Rolf, does it matter if I fix majority and have a small portion variable for the main loan (s) (not IP +costs loan)
     
  4. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
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    Location:
    Canberra and Sydney
    I'm not Rolf - hopefully he doesn't mind me responding.

    It's important you set the equity release loan up as a second facility to the existing.

    You can fix the existing loan - but keep in mind that breaking a fixed loan can be expensive if you ever need to refinance/sell during the fixed period.

    Also - you usually can't offset a fixed loan (a few lenders have exceptions to this) so ensure that your variable loan isn't too small that you end up with a higher dollar amount in your offset.

    Cheers

    Jamie
     
  5. Keen novice

    Keen novice Member

    Joined:
    15th Feb, 2016
    Posts:
    16
    Location:
    nsw
    Thanks Jamie, I appreciate your input. I was thinking about fixing $450k keeping $30k variable for offset purposes. Equity release loan - should I just set that up now even though I'm not quite ready to use it?

    Appreciate your help :)
     
  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
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    Location:
    Gold Coast
    And Im not Jamie and I dont mind you responding

    ta
    rolf