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Paying off investment property mortgage

Discussion in 'Real Estate' started by Sri4adeal, 6th Feb, 2016.

  1. Sri4adeal

    Sri4adeal New Member

    Joined:
    6th Feb, 2016
    Posts:
    1
    Location:
    QLD
    Hello,
    I need an advice on this. I've an investment property and a mortgage associated with this property. I also have a home loan on my property where I'm living currently. I've a balance of $380000 on my investment mortgage and 460000 on my other property. I'm planning to sell my investment property as it has gained in value and would like to pay off one mortgage with the aim of paying off the mortgage on the house I'm living quickly also. What will be the best decision?
    - Can I use the the money from the sale of my investment property to pay off the mortgage for the house I'm living? or am I allowed to only pay off the mortgate that is associated with the investment property for the sale of the investment property and not any other mortgage?
    - Will it be wise to use the money from sale for more investments?
    Thanks.
    Sri.
     
  2. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    653
    Location:
    Sydney
    You will have to discharge the mortgage on the investment property to transfer title and this usually means paying off the loan. If you could keep the loan open the interest would no longer be deductible without the income from the property.

    Once you have the proceeds from the sale you can do with them as you please. Paying off the home loan may be a good thing and then you can borrow further to invest.
     
  3. Corey Batt

    Corey Batt Member

    Joined:
    12th Apr, 2016
    Posts:
    12
    Location:
    Adelaide, SA
    When selling a property the title is released - the lender only allows this title to be released if their debts are paid out in full.

    Once the investment debt is paid out, any excess is then left to you - but bear in mind that you may have a tax liability to pay out at the end of financial year so you will want to keep your capital liquid for this. Best to keep the funds in an offset account until this is resolved.