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Refinancing/IP

Discussion in 'Property Finance' started by maze999, 4th Nov, 2015.

  1. maze999

    maze999 New Member

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    Hi, I have recently bought land and constructed a house on it. It is currently tenanted and neutral/cash flow positive. I put in 20% deposit for the land and after revaluing it, I was able to use some of the equity in that to put towards a 20% deposit for the construction. I paid for the stamp duty, conveyancing and all other fees out of my own pocket.

    It has been about 6 months since the construction has been completed and my construction and land loans are still separate. My broker doesn't think I need to consolidate them but I would like to just to make it more simple.

    My other question is that can I refinance the loan so I can get back the deposit that I paid and other fees? Although my loan amount will go up, I feel like its ok because it's tax deductible and I will still remain cash flow neutral or only slightly negative.

    I'm asking this because I saw the other thread on IP expenses and they were talking about an equity loan to use to pay these things. I wasn't fully sure what that meant.

    Thanks!
     
  2. Azazel

    Azazel Well-Known Member

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    You should be able to refinance if you have everything in order. Might be worth talking to one of the brokers here, but I'm sure some will have some answers.
     
  3. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Hiya

    It shouldn't make life that much more simple - it will just be one repayment as opposed to two....and you'll likely have to submit a whole new application which will result in another hit to your credit file.

    Having said that - if you're looking to pull out equity then you're going to need to submit a new app anyway so might as well consolidate that existing loans at that point.

    Cheers

    Jamie
     
  4. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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  5. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    This is more around the concept of debt recycling where ine uses borrowed funds to pay for some IP expenses so as to pay down a home loan more quickly

    do u have a home loan ?

    ta
    rolf
     
  6. maze999

    maze999 New Member

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    Thanks for the quick replies everyone!

    So I'm guessing for now, the best thing is to just sit tight and not do anything. And not make this mistake when I go in for #2!

    Another question. Is there any necessity for me ordering a revaluation on the property now? I'm planning to buy another property in the future so should I just wait until then?
     
  7. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    I expect that peops werent saying DONT do "anything"

    perhaps do a little more research on whats the right thing to do NOW, for you personal circumstances and goals.

    If your property is located in the Sydney region, I would look at locknutting the equity for sure

    ta
    rolf
     
  8. maze999

    maze999 New Member

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    Thanks Rolf. I'm in Melbourne unfortunately, otherwise I would've taken you up on your offer!

    It's more that I cant do anything regarding getting the deposit/stamp duty etc back (reimbursing myself). But I will have a look around regarding better rates.
     
  9. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    I didnt mean come to "me", I actaully meant do something, since doing nothing is often the worst outcome ( slight edge theory)

    There are others on the forum in melbourne that can help u with this if you need face to face.

    On average, chasing lower rates, will do a little in the middle to long term, whereas a debt recycle strategy with the right product mix can achieve multiples of the same.

    ta
    rolf
     
  10. maze999

    maze999 New Member

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    Thanks Rolf. Don't know much about debt recycling so I might have a read up on it.