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7.54% variable but would need to be mortgage insured and premiums capitalised. (would need to acceptable LMI postcode)
Wouldnt matter if you are employed or self employed as it is Nodoc.
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Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New Shared Equity scheme has arrived – Email us for details.Richard Taylor | Australia's leading private lender
Without actual figures it is difficult to comment but i assume that the P & I loan has been paid down over the years hence the shift in consideration to interest only.
Certainly as adviser you wouldn’t recommend they redraw as this is clearly in breach of the ATO guidelines.
One consideration would be to sell the property into a Unit Trust for the current value and pay the additional stamp duty making the full 100% of the loan interest know fully dedcutable. Adiditional funds raised could be placed in an offset account linked to their current PPOR to reduce non tax deductible interest.
The other strategies you have outlined will not work.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New Shared Equity scheme has arrived – Email us for details.Richard Taylor | Australia's leading private lender
Rather than invoice the company you would better off to make the payment on a PAYG basis.
Dependant on the amount we are talking about and the regularity would determine whether their was any Employer Superannuation considerations.
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Richard Taylor | Australia's leading private lender
I agree with Simon i think he is grossly mistaken.
On a separate note it sounds like you X collataleralised the loan which is certainly undesirable.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New Shared Equity scheme has arrived – Email us for details.Richard Taylor | Australia's leading private lender
Jim
2 choices
1) Take a 80% Lodoc / lodoc loan secured against the property you are wishing to purchase and then take a 10% margin loan against your share portfolio.
Reason this will be cheaper.
2) Take a lodoc 90% loan subject to ABN & GST registration.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New Shared Equity scheme has arrived – Email us for details.Richard Taylor | Australia's leading private lender
Yes you can borrow in your name (that is assuming you own a unencumbered house and take a borrowing against it) and make an contribution into the SMSF but the interest charged on the borrowings would not be tax deductible.
You are unable to buy the property jointly with a Unit Trust these days and offer the property as security.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New Shared Equity scheme has arrived – Email us for details.Richard Taylor | Australia's leading private lender
Hi there
One big downside is that you cannot borrow money in your SMSF which means everything you do needs to be paid for in cash.
Given the costs of set up and the ongoing costs I normally recommend a minimum of $75 -$100K to my clients before establishing a SMSF.
One big plus is flexibility and choose of investment platform.
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Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New Shared Equity scheme has arrived – Email us for details.Richard Taylor | Australia's leading private lender
Hi Danish
As Gary has pointed out i think you are slightly mistaken in your thinking. The interest raised on your investment properties to use for your PPOR is certainly not tax deductible.
It does not matter on what security the funds are secured it is the purpose of the loan that is the burning issue as far as the ATO are concerned.
By raiasing the money and using the funds to buy your own principal place immeditely disallows the deduction.
WIth regards to your current IP’s i would certainly not have thse as P & I especially as from what you have just said you are likely to be borrowing a fair chunk of money for your new PPOR.
If you made them interest only and linked up a 100% offset account you could pour all of your funds into this account so that when you settle on your PPOR you can trasnfer the offset account over to the PPOR loan or withdraw this and use the money for the deposit.
From your statement about paying the $300K home loan in 2 years you must be earning around $550K per annum. If this is the case i think you should have sought professional advice originally and purchased the existing IP’s in Trust.
Whilst you could look to sell them to a Trust making the interest 100% deductible you will incur stamp duty and could trigger a CGT event.
Sctructured properly all of this could have been avoided.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New Shared Equity scheme has arrived – Email us for details.Richard Taylor | Australia's leading private lender
I can think of a couple (one which will go to $15M) but again they will want to charge DEF to get some of their money back.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New Shared Equity scheme has arrived – Email us for details.Richard Taylor | Australia's leading private lender
2 initial costs
1) Stamp duty payable on the Transfer value. This will vary from State to State so you need to have a look at Office of State Revenue website in your state.
2) CGT maybe payable if the property was originally an IP. The calculation can be difficult to put in black and white and would need a lot more information. If it was originally a PPOR then no CGT payable.Other than that not a great deal more.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New Shared Equity scheme has arrived – Email us for details.Richard Taylor | Australia's leading private lender
Sorry for my negative response I was just so darn tired and frusterated when i hear a reply from a MB like” Lets X collaratilise 1 property with another” it is obvious they have no understand about loan structuring.
Terry has given you an excellent response but i could go on for hours with reasons why you wouldnt if you are looking to build your portfolio.
One scenario image you have 3 or4 IP’s all X ed and decide to buy something else. You PPOR mortgage has been repaid and you think with all of the equity in your house you should be able to afford another IP.
You approach your MB who works out the figures and tells you that due to the servicing model your Bank uses you cannot support another loan. You know darn well you can and another lender approves your loan using their servicing.
Problem comes is that you want to try and access the equity in your own home but because all the of the IP’s are secured against you need to try and now unravel the mess.
This would involve 4/5 new valuations (preying like mad that the original lender still agreed to go to 80 / 90% LVR on that security) and then trying to ascertain the amount they required by way of a cash payment to release the security of your PPOR.
Other than a very expensive exercise the time frame could be weeks or months to get an answer. Your MB will not be too keen on doing this for you as he receives absolutely nothing (although in saying this i do it for my clients). You then have to deal with the Banks security department who have one thing in mind and that is making sure there security is covered.
Too much of a headache for me especially if you had any of the loans fixed and then of course the Deferred Establishment Fees if any would come into play.
Avoid it like the plague if you are wanting to build a portfolio.
If in doubt change MB’s
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New Shared Equity scheme has arrived – Email us for details.Richard Taylor | Australia's leading private lender
OMG Where do i start.
Let me take breath and come back to you.
Just avoid at all costs where possible.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New Shared Equity scheme has arrived – Email us for details.Richard Taylor | Australia's leading private lender
Aaron
Yes if you sell the property then it will be subject to stamp duty against on the Transfer value.
CGT will not be payable as it is your prinicpal place of residence and is exempt for upto 6 years (a consideration before you do sell it into Trust).
A 5% deposit is possible on interest only (a nil deposit is available also but comes with slightly higher charges) and LMI can be capitalised.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New Shared Equity scheme has arrived – Email us for details.Richard Taylor | Australia's leading private lender
Whose name is the IP in ?
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Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New Shared Equity scheme has arrived – Email us for details.Richard Taylor | Australia's leading private lender
Hi Dasha
Each lender will apply its own serviceability criteria and you will be amazed at how the difference in borrowing capacity changes from one lender to another.
What it is you are trying to achieve ?
From where i sit you should easily be able to obtain a LVR of 75-80% on your existing property and if the extra funds are to purchase your first IP will have the rent to support the loan as well.
Would need more information to advise further but really equity is a wonderful thing. Just remember to never over comit irrespective of what your lender offers you.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New Shared Equity scheme has arrived – Email us for details.Richard Taylor | Australia's leading private lender
Yes you certainly can as long as you have never lived in the property or occupied any other property that you have purchased as your principal place.
Structure it correctly with your offset account and put in as little as possible as deposit. Hope this helps.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New Shared Equity scheme has arrived – Email us for details.Richard Taylor | Australia's leading private lender
Hi Aaron
$10K FHOG you must be in Vic.
If the loan is structured correctly you can have your cake and eat it.
The requirement of the FHOG is that you reside in the property for a period of 6 months continously and enter in the first 12 months.What is stop you taking out an interest only loan at 95% using an offset account applying for the FHOG and then in 6 months and 1 day renting the property out and claiming the relative interest and associated benefits as a deduction.
Admitedly you will not qualify for the FHOG if you buy in Trust but you can always subject to Stamp Duty switch the property into Trust at a later date if you so desired.
The other alternative is to purchase an IP first up and as long as you never occupy this or any other property you purchase as your PPOR you will still qualify for the FHOG down the track. Maybe not 10K but likely to stil be with us.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New Shared Equity scheme has arrived – Email us for details.Richard Taylor | Australia's leading private lender
Must admit never heard of a major lender not wanting to lend against a block of units. I have 2 blocks in Brissie one a unit block of 18 14 x & 4 x 2 and the major lender concerned never had a problem.,
Sometimes on a strata title block the lenders dont like to have a concentration in the 1 development but certainly not on a non strated block.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New Shared Equity scheme has arrived – Email us for details.Richard Taylor | Australia's leading private lender
Difficult to target Nodoc as there is nothing at all declared.
Processed over 200 lodoc / nodoc loans last year alone and never had a single audit from any of my clients or reports from any lender syaing they were providing any information to the ATO.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New Shared Equity scheme has arrived – Email us for details.Richard Taylor | Australia's leading private lender
Hi Tom
No they will not force you to sell but like any other no evergreen loan it has a 25 year term so you would need to pay it out.
The property would be revalued and you would need to pay out the EFM and the 40% Capital gain. No real drama.
Rismark are manging the funds on behalf of a number of superanuation funds so they are quiet ok with a long term investment.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New Shared Equity scheme has arrived – Email us for details.Richard Taylor | Australia's leading private lender
