I have a scenario I have been thinking about and keen to explore what others think (purely an exercise, not a real life scenario):
I have no PPOR but have 350k saved in the bank.
I started my own business 4 months ago which is performing well.
I am keen to buy an IP but will only qualify for a Low Doc Loan. Given I have no equity to draw upon then I would need to use 40% of non deductible cash as a deposit.
If the property is worth say 500k then this means my deposit would need to be 200k of which would be non deductible. I am not sure how much that is per annum at current intereat rates but I imagine significant.
If the right property came along though would you still do this and then just perhaps refinance when you have a PPOR?
I have no PPOR but have 350k saved in the bank.
I started my own business 4 months ago which is performing well.
I am keen to buy an IP but will only qualify for a Low Doc Loan. Given I have no equity to draw upon then I would need to use 40% of non deductible cash as a deposit.
If the property is worth say 500k then this means my deposit would need to be 200k of which would be non deductible. I am not sure how much that is per annum at current intereat rates but I imagine significant.
If the right property came along though would you still do this and then just perhaps refinance when you have a PPOR?
Low Doc Loans and Investing
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