Hi I was told by a bank manager that you can actually tell they bank that you are buying your property for investment therefore only paying interest only but when you actually make the purchase instruct the conveyancer to put the property down as PPOR. What are the consequence of doing this way? I asked the bank manager and he said none but I would like to seek others’ opinion on the matter.
You are dealing with two different entities here. The Bank and the State Government. The bank lends you money to buy the property, and honestly they don’t care whether you use the property for living in or for renting it out, as long as they are happy you can service the loan. The State Govt, however, does care and you need to demonstrate that you have lived in the property for 6 months within the first year of owning it. If you get caught they will clawback the FHOG and impose some penalties. Will they find out? I don’t know.
nightelves wrote:Hi I was told by a bank manager that you can actually tell they bank that you are buying your property for investment therefore only paying interest only but when you actually make the purchase instruct the conveyancer to put the property down as PPOR.Wow. If an independent broker gave that sort of advice, ASIC would be clawing back their credit license.
You can take out a loan as interest only irrespective of whether it's an IP or PPOR – so don't feel the need to make it an investment loan if the reason is to set it up as interest only.
If it is actually an investment property and you have no intention of living in it for six months within the first year – than you can't claim the FHOG.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Jamie my sentiments exactly.
Remind me to make a note of the Bank managers name and number.
Suprised he didnt also suggest that he had a mate with a printing press if you wanted some nice new looking payslips and group certificate printed up. Although saying that perhaps he will come and visit when you are inside for mortgage fraud.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
nightelves wrote:I was told by a bank managerStop right there.
Unless there are extreme circumstances I would always use a broker over bank staff.
If nothing else a bank employee only has access to their products – a broker can access many products from different banks. Your best option may be another bank – can't see your manager telling you to go up the road for a better deal.
I remember back 10 years ago a bank manager told clients to make a investment loan PI. Otherwise how will you pay it off? This is while they still had private debt. Could have cost them many thousands in extra tax.
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
Terryw wrote:I remember back 10 years ago a bank manager told clients to make a investment loan PI. Otherwise how will you pay it off? This is while they still had private debt. Could have cost them many thousands in extra tax.Scary hey. I had a client tell me that a financial adviser they spoke to recently made the same remark! How else are you going to pay it off???? A financial adviser!
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
to make it easy and without any fuss, just live in it for 6 months, and then rent it out afterwards so that you get th FHOG
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