Hi Oz

Sorry to hear about your position with the Ex. Never been there but cant imagine it is pretty.

If the existing property is in your name and you are servicing the loan why not refinance and use the equity to pull out a deposit for your new home.

Then take a new standalone loan against the new property.

Structured correctly and subject to equity you would be able to minimise your costs as well as finding something that you can call yours rather than renting. 

Hi Marsmac

Firstly welcome to the forum and I hope you enjoy your time with us here.

Yes what was obviously a good idea initially sounds like a real mess now given the changing circumstances of the parties involved.

Tell me where your parents actually on Title or did they merely provide their security as Guarantee.
If they are on Title and you wish to move forward then YES you will need to transfer the Title into your name.

Remember any income they receive may effect their Pension entitlement anyway so might be an idea to do so.

Other issue you may have is that lenders generally are tightening up across the board so refinance the deals maybe harder than initially thought especially the development deals.

Easiest thing is to get your mortgage broker to have a general look and see what he suggests.

Once you have cleaned up the deals then moving forward should cause you less issues in the future.

Still a couple of lending options left for clients wanting cash out when they refinance.

Hi Devo

Yes you will still be elligble for the Grant as long as you occupy the property for 6 months within the first 12 months after settlement.

Yes the Goverment might give you the Grant but might find it harder than you expect to obtain finance as lenders dont like Owner Builders especially at the higher LVR levels.

Also mortgage insurers dont like them either so that will limit your borrowing.

Might want to get a contract builder to build it for you.

Just your income and expenditure that would be a start.

He could merely do a 2nd mortgage carry back.

More information would be required before answering that one.

As Terry mentioned both mortgage insurers have dipped out of the Lodoc refinance market.

How much are you looking to fund over and above the current balance ?

St George policy on Cash Out Lodoc is

The Low Doc Home Loan is NOT AVAILABLE for:

• Relocation loan
• Strata title with extended settlement period
• Building Loans – Owner Builders
• PAYG applicants (except where there are joint self-employed and fully verified PAYG applicants.
• Company borrowers
• Trusts
• Cash outs >$10,000 (cash out limited to refinancing expenses)

Who has said that your borrowing capacity is only $50,000 ?

Each lender has its own serviceability criteria and there is a massive difference between the highest and the lowest lender in terms of serviceability.

Is your Cousin able to offer you any Vendor Finance to cover your deposit and acqusition costs ?

If you can cover these then anything is possible.

Further information is of course required to give you an assessment.

Just make sure he really is a Licensed Real Estate as it would be unusual for the agent to be Licensed in both Victoria and Qld.

Are you sure he is not from a marketing firm offering you these areas where both properties are brand new and the amount of kick back commission he would receive from the developer is difficult to assess.

Normally what happens is that you end up paying over the odds for the property.

Just get your mortgage broker to undertake a valuation of the property prior to go to contract.

Which State are you in and do you qualify for the First Home Owners Grant ?

Hi Gomez

Always good to share the negatives of cross collateralising loans with a fellow forumite as most banks have it in their interest to ensure that all of your loans are crossed and one or two lenders have their staff on inventive schemes when it comes to maximising security.

All i was referring to with the split was that you would have the loans separate to easily identify what interest related to which loan.

Let us assume that you have a property valued at $300K with a loan balance of say $160,000.
You could take out a line of credit to a level of say 80% of the $300,000 which you would then use to cover deposit and acquisiton costs on your new IP's.

Imagine the first IP cost $250,000 and you wanted to gear to 90% LVR.

From the LOC you would draw down an amount of say $25,000 representing 10% deposit and a further amount of $15,000 to cover your purchase costs. You would then split the loans so that you had the following splits:
1) Original interest only loan for the $160,000
2) Interest only for the $40,000
3) Remaining Line of Credit for $40,000 ($300K x 80% – $160k – $40K )

Each loan has a separate statement and makes it easier to account for the interest on each individual property come June 30.
The loans dont have to be secured against the individual IP's although over time with increased equity this can be done to tidy them up.

Point noted on the website with thanks.

Hope this clears up the confusion.