Hi all,
I am having an idea of buying a block of land with one of my friend and then build a duplex on top. We both will keep one as our PR. We both need finance if this happens and the mortgage will be splitted to 50/50. Any one did this before? Is this idea feasible?
Really appreciated for your advice.
Hi Xuxu
Financed many a similar situation and it can work well but as long as you understand the potential issues.
The initial Title to the land will be in joint names and so will the ongoing construction loan.
This means that both of you will be party to the loan and jointly and severally liable for the entire debt.Once construction has been completed and the Titles split you will need to refinance and each of you take out your own loan on your individual property.
What happens if one of the parties cannot get finance for his half ?
The remaining party will not be released from the loan liability and this may have an effect on his or her ability to go forward.
Whilst i can see the attraction about doing the deal in the first place i think you to understand and appreciate the complexities about buying together.
Get your Mortgage Broker to test the water first and ensure from the information you give him upfront you will be able to both qualify down the track as this will save a lot of angst when it comes to it.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Qlds007,
Thank you very much for your advice. I will look in it.
Cheers
Xuxu
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