Hi,
I have a freind in sydney who is very close to us.They are retired people.They have a house in sydney which is valued at 350K now.They bought it 9 years ago for 70K for cash..
Are there any ways of getting money out of this property so that they could give the money to us for investing,and we could give them more interest rates than the bank giving say 9%
For example they would like to gives us a 50k at 9% .
How can they take the money out of the house.
They probably can get a loan since they retired.
please advice
thanks
They could get a low doc loan whereby they slft declare their income without providing proof. Rates around 7% unless they can prove they are in business and have an ABN.
or
They could get an asset lend whereby they will be lend money purely based on the value of their house. Not many lenders do this these days. The rates are pretty high – around 9%.
or
They could get a seniors loan. This is where a bank lends them money secured on their house and they don’t have to pay anything back. It comes out of their estate when they die. Rates are about 6.5% I think.
The last one may be the best option. Do they have any income?
And watch out about affecting their pension payments (if they get it). There are various rules about income allowable and about gifting etc.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I would suggest that if you value your friendship with this old couple that you think very carefully about borrowing money from them & paying them a higher interests.
What if your investments went horribly wrong? Where does that put the old couple? What if they then loose the roof over their heads?
Can you live with that even though your intentions were good?
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