11 Jul 2016

The split

Say you have your $500,000 house, and want to buy a $330,000 property, what are you going to do?

The maximum lending you will get will be 80% which is $400,000. What you would do is set up a line of credit with a split in it.

So the total lending on this property would be $400,000. You would have one split at $100,000 and another at $300,000.

The reason that you have a split there is that you want your personal debt and your investment debt completely separated. For tax purposes at the end of the year and your personal record they need to be on separate accounts.

If they’re in the same account it is very hard to separate what’s going on.

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