Forum Replies Created
NO not when she is on the Title.
Do you have a copy of her Credit File if not suggest you obtain one ASAP.
Nothing is beyond repair especially when you have that much equity.
Richard Taylor | Australia's leading private lender
The loan amount is too high for my Company and think at that level you will struggle.
Any potential wrapper is going to need to add on a considerable amount merely to cover the costs of investment stamp duty at that level which isnt going to be cheap. Why dont you just sell her a portion of the property and pay the duty on the transfer amount.
Richard Taylor | Australia's leading private lender
You would probably be ok.
On that basis i am assuming they were registered in 2002 ish.
As long as they were paid relatively promptly you should be able to achieve that.
Richard Taylor | Australia's leading private lender
Hi Wrap
Yes as Raymond has mentioned depending on the size of the default there are certainly lenders out there who will consider the loan.
The balance of the application information is important in cases like this.
Richard Taylor | Australia's leading private lender
STL
I am a great lover of multi unit dwelling blocks and own a couple of larger ones in my portfolio.
One thing to bear in mind is when there are more than 4 units in the block it will be classified as a Commercial loan rather than a residential loan and will mean that you will need a slightly larger deposit and potential there will be some higher set up costs and possibly a higher interest rate.
Structured correctly a MUB gives you greater control and less cost when it comes to Body Corporates etc.
As i say i am personally an advocate of this type of asset.
Richard Taylor | Australia's leading private lender
STL
I am a great lover of multi unit dwelling blocks and own a couple of larger ones in my portfolio.
One thing to bear in mind is when there are more than 4 units in the block it will be classified as a Commercial loan rather than a residential loan and will mean that you will need a slightly larger deposit and potential there will be some higher set up costs and possibly a higher interest rate.
Structured correctly a MUB gives you greater control and less cost when it comes to Body Corporates etc.
As i say i am personally an advocate of this type of asset.
Richard Taylor | Australia's leading private lender
AO
There are one or two ways around but like anything it all depends on the numbers concerned.
The higher the loan amount and the higher your marginal tax rate the better the figures work.Easiest way around it as mentioned is to take an interest only loan and utilise a 100% offset account.
Richard Taylor | Australia's leading private lender
Alternatively look elsewhere for the loan.
She would have to have absolute horror of a credit report to get rejected where you have considerable equity in the property.
Do you have a copy of her Veda Advantage Report so you can see what any potential lender is seeing.
Richard Taylor | Australia's leading private lender
Hate to say this is not correct
You are basically refinacing on house A to buy into house B. As you will still own 1/2 of house A, that portion of the original debt 1/2 $240K will be deductible, any additional borrowing will have been for the purpose of buying a new residence.
Assume you purchase your Spouses interest out of the property and then rent the property out the entire amount if interest charged on the funds used to purchase your Spouses share is fully deductible.
We utilise this strategy in conjuction with a couple of larger accounting firms for our clients all the time. Stamp duty is payable on the Transfer but often works out a lot better than depending on the marginal Tax rates.
Richard Taylor | Australia's leading private lender
Eldredni
Most of the Pro packs offered by the majors offer the same benefits in fact the CBA one is probably the worst one of the Big 4.
And on the discount front i think the days of getting a further discount off what is being offered has probably been and gone unless you are a large client. 6 months ago I would have agreed with you but not now.
Richard Taylor | Australia's leading private lender
Andrew
Whilst your and your sisters loan are separate you will both be jointly and severally liable for the entire debt.
Personally i would still avoid using the equity in this property for your future IP acqusition.
Assuming the valuation is accurate you would refinance to a new lender (wouldnt have a choice as the new lender would want 1st mortgage) and raise $35,000. Then taking out your acqusition costs you would use the balance as deposit.
This could be with the same lender or a new lender.
Difference being that the loans would not be cross collateralised and not cause you problems down the track.
Mortgage insurance is going to be payable and you probably need to look at someone who will capitalise the premium as the equity is a little tight.
Richard Taylor | Australia's leading private lender
AV
What you are suggesting is common strategy which we implement for clients regularly however couple of pitfalls you need to be aware of to make sure it is worth undertaking:
1) Stamp Duty will be payable on the Transfer as you mention and this will vary from State to State. The Duty is based on the market valuation which can be determined by a Letterhead valuation. Of course this figure may well be higher than the Bank valuation which will cost more in duty but may assist you with Capital Gains Tax down the track if the asset is sold.
On the downside of course is that the Bank will only lend against THEIR market valuation and not your Transfer price. Given that the property will be in joint names with your parents it starts to get a little messy if you want to borrow 100% of the Transfer price.
2) Whilst the property may now be in Joint names with your parents and 50% of the rent credited to your serviceability you may well find that any potential lender considers you 100% liable of the entire debt which will effect both your and their future seviceability. Without knowing their financial position and whether they are entitled to a Pension it is difficult to comment on whether ownership will effect this.
3) You could always consider selling the property into Trust with you as the sole Unit holder and achieve the same end result however dependant on your marginal tax this could prove better alround. Additional stamp duty would be payable however the cost may now be well overcome by the increased benefit.
Certainly now you could look at borrowing 100% of the Letterhead valuation of the property even though the Bank valuation maybe less.
Richard Taylor | Australia's leading private lender
Andrew
I am suprised that your current lender will only go to 80% LVR but in saying that it is possible.
Yes utilise the equity you have in the current property and gear to 90% and then use this as deposit on a new IP.
Try to avoid using the equity in the property you jointly own with your sister as Terry has mentioned it will get messy.Make sure your Broker sets up the 100% offset linked to your PPOR and have the rents deposited into the offset account to maximise your interest savings.
All sounds good from here on in.
Richard Taylor | Australia's leading private lender
IC
Have just dropped you an email in answer to yours.
One of the issues about Transferring the property into a Trust or Company structure is that you will incur both Stamp Duty and LMI again and it probably not worth it.
Richard Taylor | Australia's leading private lender
Financing it will be the key in the current anti new developer climate.
We are finding it harder for our experienced developer clients to secure the same funding we did 6 months ago unless they have a good asset base, cash or pre-sales.
Richard Taylor | Australia's leading private lender
Maree
Rather than loose the property why not split the loan:
1) Top up with your existing lender to 80-90% and use the funds as deposit on the IP and acquistion costs.
2) Balance of the IP loan with new lender.
When the fixed rate expires you can always refinance the main loan over to the new lender as the fixed rate will have expired.Richard Taylor | Australia's leading private lender
Ok maybe we leave there.
Think it has been asked and answered so many times over the last 3 / 4 years it is not funny.
Richard Taylor | Australia's leading private lender
Approval in 14 days is pretty good at the moment.
Approval in 7 days is out of the question.
As Terry mentioned just apply for an extension.
Richard Taylor | Australia's leading private lender
Sorry who are these people you have referred to ?
namely all those people I've just referred to
Richard Taylor | Australia's leading private lender
SC
You can package it up anyway up like but the bottow line is the interest is not deductable so therefore has very little benefit.
Richard Taylor | Australia's leading private lender
