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Where to from here ?

Discussion in 'General Property Chat' started by MJS1034, 31st Aug, 2015.

  1. MJS1034

    MJS1034 Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    113
    Location:
    Sunshine Coast
    Hi guys.
    Need some much needed advice. My father in law is looking to buy an investment property. He's got his PPOR paid off valued at approximately $670k.

    He wants to purchase a property valued at around 400k and he has no cash available.

    What's the best way for him to go about it?

    Should he pull 20% deposit out of the equity in his ppor to purchase the ip.

    Or should he get a loc against his ppor? (Not to sure how a LOC works)

    Or is there another way that would be better suit his situation?

    He's seeing a mortgage broker at the moment but I'm worried she will cross collat. his loans.

    Sorry for all the questions and thank you all in advance
     
  2. Bayview

    Bayview Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    2,716
    Location:
    Mornington Peninsula
    LOC with 100% offset on the PPoR - use this for deposit and purchase costs.

    Separate loan secured by the new IP (preferably another LOC with 100% offset if possible) to fund the rest of the purchase.

    It may be better to go IO rather than LOC on the new IP, but best to speak to one of the fabulous MB's here on this forum.
     
  3. jpcashflow

    jpcashflow Well-Known Member Business Member

    Joined:
    21st Jun, 2015
    Posts:
    371
    Location:
    Melbourne
    Hello,
    There a few ways that this can be set up... I have messaged you privately.
    Will need some more information to provide a correct structure.
     
  4. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,781
    Location:
    Perth WA
    Sorry to pick but you can't get offset on a LoC - maybe you mean a term loan with offset?

    Bayview is right though, getting a loan to use as 20% deposit and costs is the way to go, with the remaining 80% a separate loan secured only by the IP.