Using PPR equity to buy IP

Discussion in 'Accounting & Tax' started by Melmac, 25th Sep, 2017.

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  1. Melmac

    Melmac Well-Known Member

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    Is this right structure?
    Withdrew equity from PPR and set up Loan # 2 and the withdrawn equity is in a offset a/c for Loan # 2.
    When buying a IP, all the expenses like initial deposit, B&P inspections and any other expenses relating to IP, pay those from this offset a/c?

    Is that the right thing to do?

    First IP so still learning.
     
    Melmac, 25th Sep, 2017
    #1
  2. Jess Peletier

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

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    Ideally you'd use a loan account you can pay out of directly, which reduces the need for an offset. But generally speaking it sounds like you've got it right.
     
    Jess Peletier, 25th Sep, 2017
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  3. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Hey @Melmac

    Pretty much.

    Just aim to have the equity release settled prior to having an offer accepted on a property.

    Cheers

    Jamie
     
    Jamie Moore, 25th Sep, 2017
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  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    As per

    I will add,doe your base home loan allow active debt recycling, ie does it have a global facility limit?

    We often find that borrowers end up with a loan product that doesnt allow same

    ta
    rolf
     
    Rolf Latham, 25th Sep, 2017
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  5. Terry_w

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

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    Broadly is on track. See my tax tip 1 on the risks and my ideal loan structure for more details
     
    Terry_w, 25th Sep, 2017
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  6. Melmac

    Melmac Well-Known Member

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    Never heard of global facility limit before, so I am not sure. Will need to check with the broker.
     
    Melmac, 27th Sep, 2017
    #6
  7. Colin Rice

    Colin Rice Mortgage Broker Business Member

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    Macquarie, AMP and St George are decent choices.
     
    Colin Rice, 27th Sep, 2017
    #7