Fully deductible investment loans
No Deposit or 100% plus Investment Loans
It is important that you understand that for lenders 100% is the purchase price or
valuation - not the total cost. We are not saying
you can't borrow more, it's just important to understand what the basic
terminology means.
The days of 100% no deposit investment loans are over and many believe that they will never return. That's not to say
that you can't structure your borrowing to allow you to maximise your tax deductions. When
talking about 106%
investment loans most savvy investors mean they are using 106% borrowed funds
ie: they have borrowed the purchase price and all costs. However
that does not necessarily mean that they have borrowed all the funds
using one security or using one lender. In most cases they need to
offer other security to make up the equity
shortfall and in this way completely avoid LMI but maintain the maximum
deducibility for their borrowings. Click
here for an explanation on how to leverage the equity you
have in your current home in order to purchase a new investment
property and maximise your loan deductions.
Before we go any further we need to stress that this is not
tax advice, you should seek advice on your individual circumstances
from a qualified tax adviser.
Let's say you have a property worth $300,000 with a current
loan of $150,000 and you want to purchase a new investment property
worth $250,000 and maximise the borrowing for best tax results. If you
want to avoid LMI you need to come up with roughly 24% to keep your new
borrowing below 80% plus stamp duties etc. So you refinance existing
property to $210,000 (usually with a new sub-account for the additional
$60,000) and you borrow $200,000 using the new property as security.
Thus your total deductible investment borrowing for the new property is
$260,000 or 104% of the purchase price.
There are many other implications particularly where you are
using your owner occupied property as the first security - WARNING - You should not use
a redraw to access the equity for investment purposes. There are also
potentially serious implications on using an offset account - so please
talk to us before you make any commitments then seek clear taxation
advice.
Though we're a mortgage broker who pays you a rebate, we pride
ourselves on prompt first class personal service to overseas customers
looking at buying a home in Australia. As our testimonials confirm, we
have exceeded the expectations of many of our clients and will
endeavor to exceed yours. (Home buyers from outside Australia should
see below for more information about non-resident investment details).
The majority of our loans are done virtually, using fax,
email and good old fashioned post. We do home loans for people from all
over the world in this way.
We keep your hassles and our costs down.
Click here to
go to our express inquiry form or call 1300
137 586. We're confident you'll appreciate the Peach Home Loans
service!
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