Sounds a bit fishy and problematic. Why is the guy (your client) happy to forgo $150,000?

Richard?

If you have had the funds in your account for a while you could look at a slightly higher lvr loan up to a maximum of 95% that way showing the lender you have the funds required for stamp duty etc. With the price $70k the difference in lmi costs won’t be huge.

– Two or 3 different lenders. Complicated but doable.
– Finance against other properties if equity available. Good option if possible.
– Do as commercial loan. Ok option but more expensive.
– Widebay building society say they do 8 on one title but I’ve never tested it, rate is a bit high too.

It may not be impossible. Are you going to contract to one organisation? Will they be your only source if income? If so it may be do-able. I did once recently only 1 month self employed ang got 90% lvr $680k loan approved no issues. It really depends on your contract situation.

Hi,

You could purchase 50% of the property from her at current market value and share all ongoing property expenses. Say property is worth $300,000 (based on say the average of 2 independent valuations which would cost around $300 each but worth it for both your sakes) you pay her $150,000.

On the loan side of things you would probably be best to get 2 loans with you both guaranteeing each other. I have done a loan loan like this but was pre new lending laws and the GFC so make sure your broker or lender is on top of the current lending policies/ lending options before you get too far into it.

– your loan would be for say $150,000 + stamp duty and your half of legal / bank fees.
– her loan is a bit tricky to work out not knowing the current debt amount. She would need a bit of equity in the property if you are borrowing 100% +

Things to consider:

– selling her half would trigger a capital gains event for her
– you would have to pay stamp duty on your half
– may be some ongoing issues for her claiming interest deductions which need to be considered when arranging loans.
– need to have some sort of agreement drawn up to cover all eventualities such as death, financial hardship, forced sale etc.

Hi,

Stamp duty is payable on value not sale price. If it were just sale price every man and his dog would be selling for less than market value with a cash deal on the side. This is deemed to be tax avoidance and is illegal. Not sure how each state picks up these favourable sales in their data but if yoir friend get caught not only will they have to pay back the stamp duty but may face more serious charges such as fraud etc.

I am sure people do this a bit but if your friend and his brother intend to really take the piss with the sale price at well below market price it may get picked up by the relevant state revenue office. Especially since there would be some tell tale signs such as no an real estate agent involved, same solicitor and same last names?

Not worth it..

90% no probs with 2 regional bank options, 95% second tier lenders only at this stage although this may change any moment now they way things are loosening up.

Hi,

Many lenders require all adult beneficiaries to guarantee the loan anyway so this might fly. Aletrenatively you might put both of you on as directors to start with then remove your wife as director after the loan settles. No doubt the lender would require a personal gaurantee from her anyway so they are covered.

It may be deemed a managed investment scheme which puts the same compliance burden on you as an unlisted mortgage fund ie you need an ASIC approved prospectus and a financial services license, licensee as responsible manager as well as regular independant audits etc. I suggest it may not be as easy as you think to set up.