Hi,
Just wondering with the rent to buy home loans, is it possible to make it a 100% offset account that the owner only has a) available their portion of the extra money they make from the the person renting? Or b) the renter can deposit the owners extra amount into a seperate account and leave their portion in the home loan account? (What I am wanting is a structure that will allow the renter to deposit all the wages into the home loan account and offset the interest component, but still remain protected from the owner withdrawing all the funds?)
ThanksI don't think it will work. The title of the house is in the owner's name, and not the renters so any linked accounts must be in this name also. The owner could let the renter use their account, but any benefit would go to reducing the owners interest. They could give some sort of credit for this, but it would get messy. Also problems if the owner were to get into trouble and someone gets court judgments against them 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
Hi starbaby
I've got to agree with Terry. Also, could you clarify if your question refers to Rent To Own (Lease with an Option) or an Instalment Contract? It would be theoretically possible with an Instalment Contract but I don't know of any software available to vendor financiers, that could do the job.
Also, just interested why you'd like to offer this facility?
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Thanks for the replys.
I was talking about rent to own. I was asking from the rent/buyers position not a seller. Obviously if this structure could be in place it would mean the renter could theoretically knock down the size of the loan quicker (Or at least knock down the interest owing at the time) thus building the equity faster. Clearly the problem is protecting yourself (the rent/buyer) but if the bank does somehow have this type of loan structure with security in place, would this be something a seller would consider setting up to help the buyer bay off the home loan faster? My guess is that I will need to talk to a bank to get the exact answer as it depends on all the loan structures they have in place, but i'm interested in your opinions on this matter and if you (the sellers) would work with the buyers if this could be set up.
Thanks
You won't get an offset account in a name different to the loan so you would have to get the owner to offer an account in their name as trustee for the tenant – but even then it will benefit the owner and not the tenant.
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
Hi starbaby
I've got to agree with Terry. I just can't see a way to get this to work and, even if you could, there's no software currently available to allow the seller to administer the arrangement.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
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