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Advice Appreciated - Refinancing And Loan Structures

Discussion in 'Money Management' started by JustB, 26th Jul, 2007.

  1. JustB

    JustB Well-Known Member

    15th Jul, 2007
    Sydney, NSW
    Hi All,

    This is my first post, and I can't believe it's taken me 4.5 years since reading Jan Somers' book and starting my investment journey before finding these forums :) I feel like I've gained 1000 times more knowledge in the last couple of days reading through many threads here and on SS, than in the last 5 years! Better late than never, though :)

    Anyway, I would really appreciate any advice on my (seemingly rather unusual) situation, in order to maximise my current assets and to provide a foundation for acquiring more. So here is the rundown:

    Currently under 30, average income ~$80k, and living at home (for now). I purchased 50% share in 1 IP (parents have other 50% share - tenants in common) in late 2002, and purchased 2nd IP (on my own) in mid-2003. My current loan structure is a little messy as follows:

    - IP1 (my share)
    Purchase price = $131k
    Initial Loan = $136k with my parent's PPOR as security
    Current Loan Balance = $45k

    - IP2
    Purchase price = $280k
    Split Loan with IP1 of additional $70k secured against parent's PPOR
    New Loan of $215k with IP2 as security
    Current Loan Balance of Split = $60k
    Current Loan Balance of New Loan = $212k

    I now know that paying down the principle on the 1st loan was not the smartest move, but I am now down to a LVR of ~80% given I believe the total value of both IPs is around the original purchase price i.e. ~$410k (rather depressing, but both IPs are small units in Sydney's lower north shore).

    What I would like to be able to do now, is refinance to completely unemcumber my parents PPOR, and restructure the loans in the best possible way. My current loans are variable rate, IO payments. As my 5 year IO period is nearly up and about to revert to P&I, I want to renew the IO period, and set up a 100% offset account for additional funds to reside in.

    Is this possible??? What is the best way to structure??? 2 loans each at 80% of the respective IPs??? Single loan for both IPs??? Do I approach lenders directly, or go through a mortgage broker???

    Where am I heading with my strategy? I am booked in for the Navra course in August, and plan to start diverting additional income into MF until I have 20% deposit for IP3.

    Sorry for the long-winded post, I hope you can make head and tail out of it. If any more info is needed to clarify my situation, I'm happy to divulge.