I am wanting to purchase my next IP and have not been able to find a previous post that covers how to calculate your LOC amount when more than one property is considered.
For example if we have one IP...........
Previous Val $230K
So for LVR we have - total val ($230K + $136K) = $366K
Total debt = ($155K + $136K) = $291K
Therefore LVR = 291/366 = 80% (No LMI)
And if we were wanting to go for IP2 and be able to determine the amount of a LOC, how do we calculate this if we do not want to x-coll. Do we only revalue the PPOR and not the IP and use the original figures as above? Say the new val on the PPOR is 260K.
Do we still need to include IP1 in the calcs or do we only use the revalued PPOR and the new IP2 in the figues? The reason I ask is that from what I am reading on this forum the issue is not to have x-coll.
Say IP2 is valued at 200K
Total val ($260K + $136K + $200K) = $596K
Total debt = ($155K + 136K + $200K) = $491K
Therefore LVR = 491/596 = 82.3%
So we either need to put an additional $14.2K in to lower the LVR to 80% plus cover the associated buying costs if we don't want to pay LMI.
Total val ($260K + $200K) = $460K
Total debt = ($155K + $200K) = $355K
Therefore LVR = 355/460 = 77.2%
This gives a better LVR but does not seem logical to me as the total debt is not considered.
Option 2 is the closest
if your vals are 260 + 136 then total borrowings at 80 possible is
317 = 291 exist leaves 26.
So yes youd need to tip in around 14 ish + costs to avoid lmi on the new place.
Set IP2 up as a separate loan and increase the 136 k loan to 162 or get a separate LOC of 26 secured against PPOR and IP1
or get a separate LOC of 26 secured against PPOR and IP1Click to expand...Doesnt having an LOC secured against multiple properties cause issues?
No - they just set up 2 sub accounts - then charge for two valuations and twice the yearly admin fees etc!!