Hi,
I am seeking some advice, direction and suggestions and I would very much appreciate your input.
My wife and I are looking to purchase our first IP this year. Our goal is to build a property portfolio that will assist us in retirement and provide a stepping stone for our three kids when each one reaches adulthood (which at this point in time can't come soon enough!:)). Before we purchase that first IP, we want to ensure we have our loan structure set up correctly and it is this area that I am seeking your advice, opinions and suggestions.
Our current loan structure is set up around our PPOR. We purchased the house in 2009 and the total mortgage is currently at $409K. The total mortgage is split in two and looks like this:
Variable P&I = $89K. This also has an offset feature that we place all our surplus money into.
Fixed IO = $320K. The fixed period has roughly 12 months left.
Last week, we sought and were provided with a bank valuation (desktop) on our PPOR. The figure came in at $630K. I am advised by my Mortgage Broker that, after all things considered we could have access to (approx) $95K of usable equity.
To move forward with our investment plan we are looking at setting up with our current lender a LOC against the usable equity ($95K), and then use the LOC for the deposit, purchasing costs, buffer etc for the IP. The outstanding mortgage for the IP will be sought from a different lender.
In relation to the loan structure for our PPOR, do you think we should be setting it up differently? Perhaps we should combine the two mortgage to one P&I, or IO loan with the offset function? Perhaps it is fine as it is?
Your time, advice, suggestions (and upper-cuts) are very much appreciated.
Loan Structure - First IP
I am seeking some advice, direction and suggestions and I would very much appreciate your input.
My wife and I are looking to purchase our first IP this year. Our goal is to build a property portfolio that will assist us in retirement and provide a stepping stone for our three kids when each one reaches adulthood (which at this point in time can't come soon enough!:)). Before we purchase that first IP, we want to ensure we have our loan structure set up correctly and it is this area that I am seeking your advice, opinions and suggestions.
Our current loan structure is set up around our PPOR. We purchased the house in 2009 and the total mortgage is currently at $409K. The total mortgage is split in two and looks like this:
Variable P&I = $89K. This also has an offset feature that we place all our surplus money into.
Fixed IO = $320K. The fixed period has roughly 12 months left.
Last week, we sought and were provided with a bank valuation (desktop) on our PPOR. The figure came in at $630K. I am advised by my Mortgage Broker that, after all things considered we could have access to (approx) $95K of usable equity.
To move forward with our investment plan we are looking at setting up with our current lender a LOC against the usable equity ($95K), and then use the LOC for the deposit, purchasing costs, buffer etc for the IP. The outstanding mortgage for the IP will be sought from a different lender.
In relation to the loan structure for our PPOR, do you think we should be setting it up differently? Perhaps we should combine the two mortgage to one P&I, or IO loan with the offset function? Perhaps it is fine as it is?
Your time, advice, suggestions (and upper-cuts) are very much appreciated.
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