Hi,
I have not yet posted on these forums but I read them all the time and have found them to be extremely helpful in my relatively short property investment journey!
I have a question about financing a loan on a block of 3 2-bedroom units, all individually strata titled. If our offer on the block is accepted, my husband and I are planning to live in one of the units initially and rent out the other two. Ultimately we envisage that all three will be investment properties in the medium term.
CBA has given us approval to borrow the full amount of the property, with my husband?s lovely parents agreeing to be a guarantor for 20% of the loan using their property as security (this way we can avoid LMI).
I would think that the best way to set up the finance is to have a separate loan for each of the three units (i.e. if the loan is 1.2 million, it would be ideal to have it set up as three $400,000 loans). However, I think CBA wants/needs to set up the 20% guarantor-secured part of the loan as its own separate loan. I guess my first question is ? is this the case, or can we ask them to combine it with one of the three loans secured by the actual units?
If it is the case that this 20% component needs to be separate, I was wondering how we should structure the finance given that part of the property will be owner-occupied to begin with. I?m specifically thinking about how we would be able to claim the fair amount of interest as a tax deduction.
The other potentially complicating factor is that while all units are 2-bed 1-bath 1-car, the third unit which we are planning to live in has a larger total floor space. Does this mean that we should be allocating more than one third of the loan to that one (again, specifically for tax deductibility purposes)?
Thanks, hopefully I have explained it all well enough!
I have not yet posted on these forums but I read them all the time and have found them to be extremely helpful in my relatively short property investment journey!
I have a question about financing a loan on a block of 3 2-bedroom units, all individually strata titled. If our offer on the block is accepted, my husband and I are planning to live in one of the units initially and rent out the other two. Ultimately we envisage that all three will be investment properties in the medium term.
CBA has given us approval to borrow the full amount of the property, with my husband?s lovely parents agreeing to be a guarantor for 20% of the loan using their property as security (this way we can avoid LMI).
I would think that the best way to set up the finance is to have a separate loan for each of the three units (i.e. if the loan is 1.2 million, it would be ideal to have it set up as three $400,000 loans). However, I think CBA wants/needs to set up the 20% guarantor-secured part of the loan as its own separate loan. I guess my first question is ? is this the case, or can we ask them to combine it with one of the three loans secured by the actual units?
If it is the case that this 20% component needs to be separate, I was wondering how we should structure the finance given that part of the property will be owner-occupied to begin with. I?m specifically thinking about how we would be able to claim the fair amount of interest as a tax deduction.
The other potentially complicating factor is that while all units are 2-bed 1-bath 1-car, the third unit which we are planning to live in has a larger total floor space. Does this mean that we should be allocating more than one third of the loan to that one (again, specifically for tax deductibility purposes)?
Thanks, hopefully I have explained it all well enough!