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Refinancing mix of loans

Discussion in 'Property Finance' started by ramblin72, 14th Dec, 2015.

  1. ramblin72

    ramblin72 Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    45
    Location:
    QLD
    I'm looking for a bit of feedback on how to split loans and the consequences.
    My husband and I have a mix of loans:
    PPOR - loan in husbands name ($110k loan, 4.6% with $70k equity)
    IP1 - loan in both names ($258k, 5.47%)
    IP2 - loan in both names ($245k, 4.92%)
    all loans with the same bank, not Xcoll

    Two things are possibly happening soon:
    1. I may have a year or 2 of no income
    2. we are looking to move our loans for better rates. At the least we would be looking at moving just the IPs.

    My questions are:
    1. if we do move our loans can we refinance them so that the IP loans are in my husbands name only to maximize the tax benefit. Is this possible as the 2 IPs were bought under both names at this time?

    2. If my husband is to go for the finance on his own, I assume I would be included in the calculation for his living expenses, however do any credit cards in my name get taken into account? I have a credit card with $20k and keep it at zero balance but I know banks look at limits not balance.

    The goal is to maximize tax deductions and my husband has all the tax to claim against. We also want to keep our equity in our PPOR.

    Thank you
     
  2. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,756
    Location:
    Perth WA
    Hi Ramblin,

    Changing the names on the loan doesn't change tax deductions as they are based on who's on the title, not the loan. So even if the loan is just in hubby's name, the deductions remain the same. Also, b/c you're both on the title you'll need to guarantee the loan - all owners need to be on the loan in some form.
     
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,949
    Location:
    Sydney
    1 is a tax question and changing loans like this will not change deductibility of interest. Be careful and seek advice.

    2. no
     
  4. ramblin72

    ramblin72 Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    45
    Location:
    QLD
    ok, thank you jess and terry. that's very helpful