Looking for LOC loan
- Thread starter kennyboi
- Start date
Yes, I have loans secured on all my properties.
I don't have fixed price yet, still 2 more quotes to come next week. Estimate is roughly just under 200k.
The only security I can offer is equivalent in cash amount lock into lender's term deposit, or shares + cash.
The 200k loan I obtained from the bank was a normal variable + offset loan, it was not the right type (LOC) for tax purposes. It's too troublesome to change loan type with the bank.
Is my request possible?
Loc isn't usually required for tax purposes if the rest of the deal is put together the right way
Ta
Rolf
Ta
Rolf
Got any examples?
The loan I got now can redraw, but must be to my own transaction account. I can't think of anything else.
Create a new clean transaction acct that has only borrowed money in it. Write cheque from that account . It's your personal suspense account.
Seek specific tax advice
Ta
R
some tax advisers would argue yes, because most LOCs are transactional and therefore maximise nexus between spending and borrowing.
Also, for some the capitalisation of interest is worthwhile
ta
rolf
Also, for some the capitalisation of interest is worthwhile
ta
rolf
I am one of those tax advisors - the LOC can be converted to a IO once it is used so only temporarily higher rate.
6 years ago I said I wasn't a tax expert. Now I still don't regard myself as a tax expert but I am a lawyer who knows the deductibility of interest and I advise on this area. I certainly know more than you do.
Yeah of course you know more than me, I've done 0 study in that field.
http://somersoft.com/forums/showpost.php?p=1135997&postcount=2
So earlier this year you weren't an expert then either? When exactly did you become an expert then?
Like I said, I am no tax expert. But unlike yourself I am more than qualified to advise on tax.
Funny you ask this question because yesterday I was enquiring with a loans manager here in Geelong in relation to the same thing. I've previously used a term deposit as security for a mortgage whilst I was living in Perth. It can be done. It was with Westpac.
Yes you can use a TD as security. Not a bad idea as beats a construction loan any day.
Maybe once the GF is completed you could get the entire property re-valued and try to recycle the debt back onto the property itself and go for a Standard variable type loan if the 0.15% is major annoyance.
Maybe once the GF is completed you could get the entire property re-valued and try to recycle the debt back onto the property itself and go for a Standard variable type loan if the 0.15% is major annoyance.
Term deposit security
Using a term deposit as security what does the bank actually take?
I.e. If a property is used they take the deed. What is to prevent someone taking a loan against a term deposit and then cashing in the term deposit before the end of the term?
Using a term deposit as security what does the bank actually take?
I.e. If a property is used they take the deed. What is to prevent someone taking a loan against a term deposit and then cashing in the term deposit before the end of the term?
This is a good question.
Perhaps the lender will only consider the TD as security if the TD is with them? That way if you go to make a withdrawal before it has matured, bells go off and the SWAT team abseil down from the rafters.
You won't be able to access the TD while it is being used as security.
Hello Erin,
They take a charge over the term deposit and it has to be held with that bank and cant be cashed in while is used as security of course. Not all banks offer this.
