Using money from a re-draw facility

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Using money from a re-draw facility

Postby lennie on Wed Aug 01, 2007 7:06 pm

Hi,

I have a loan on a property that is an investment. The loan has a redraw facility attached to it and I was wondering if anyone can tell me the pros and cons of using it.

I want to take some money out to buy a course so it is an investment decision. Not a holiday or some silly thing, I wish!!

I know it will cost me money to take out but apart from that the bank sais no interest to pay and it won't affect the loan at all.

I just find it hard to believe that there is money sitting there that I can use for free virtually. Unless of course I am missing something!

My tax accountant said it would benefit my tax position if anything and didn't think there would be anything wrong with taking it out.

So I would really just like to know someone elses experience of using a redraw facility. If somebody would mind sharing. :lol:

I haven't had experiences with loans before so this is new. My mother is horrified that I would consider doing it so I need some concrete facts to give to her! (She is on the loan as well :roll: )

Cheers
Lennie
You are not beaten until you give up.
lennie
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Location: South East Queensland

Postby daniela on Wed Aug 01, 2007 8:20 pm

Hi Lennie,

You know best. I think that you have the answer already, given by your accountant.
If it is ok from his point of view, then it should be ok. As long as the course is worth increasing the mortgage, and the repayments that you will aquire because of the redraw.

If it suits your needs than it is ok. I believe that only you can answer that.

However, I do not think that any course is worth using the redraw facility, especially when is an investment property. Maybe it is just me and I am an old fashion girl.

Maybe someone has a better idea.

Daniela
daniela
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Postby lennie on Fri Aug 03, 2007 6:06 pm

Hi Daniela

thanks for your reply.

The repayments on the loan won't go up that much if I re-draw the money and I am going to pay it back as quickly as I can so hopefully we won't notice too much of a difference.

It was my last option basically and the best way or cheapest way if that is the right word for me to get my course. Hopefully in the long run it will pay off. :D

Cheers
Lennie
You are not beaten until you give up.
lennie
Wealth Forum Member
 
Posts: 78
Joined: Thu Mar 23, 2006 6:03 pm
Location: South East Queensland

Postby daniela on Fri Aug 03, 2007 6:31 pm

Sounds like a great plan Lennie,

You already figure that out. I have never done that before, Please let me know how you went. I never knew that you can pay it as quick as you want to.

Chat to you soon
Daniela
daniela
Wealth Forum Member
 
Posts: 461
Joined: Thu Dec 22, 2005 3:33 pm
Location: Perth


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