Forum Replies Created
Hi David
You would be better of requesting Westpac switch the loan to an interest only loan and trying to claim the interest on the balance.
Attach a 100% offset account to the loan to funnel your income into to save you interest whilst the house is being constructed. Then switch this to the new ppor when complete.
As long as the loans are not cross collaralised you wont have too much of a problem. Just watch WPac they love to X C loans along with the BIG C. Makes you wonder whether the local Branch Manager gets paid on XC commission.
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
Crusade
A LOC on an IP are you sure that was wise.
You maybe talking about $300 to cover you release and transfer fees to an altenative lender but that may not be necessary. Have a look at the structure and you may be able to stay put and just get the securities re-worked.
If this is not possible then i assure you the costs of moving will be very worth it in the end.
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
Swifts must ask whether you Accountant really fully understands the concept of an HDT and whether he has seen any of the private rulings.
I think if he had experience in establishing the Deed correct he would not be trying to get you sign a waiver.
A DT wont be much good when you buy a negatively geared property.
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 kerumai
A couple of quick poitns to consider:
1) Dont spend unnecessary money on a Trust Structure until you have decided what path of investing you are going to follow. Whether it be purchasing Positive geared properties where a Disc Trust maybe appropriate or negatively geared prpoerties with capital growth whereby an HDT may be the way to go.
2) You Bank will probably have little or no idea about structuring your loan for investing. They will suggest cross collaratlsing the loans by offering to lend you 110% of the new IP purchase price and taking your PPOR or similar as security for both.
Dont tread this path.
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 Simon
Dont want to contradict Wendy but this statement is not quiet correct
However, with a trust, any losses are held within the trust and cannot be claimed. This is certainly the case with a Disc Trust but the case with a HDT or Hybrid Dics Trust.
With an HDT the property is purchased in the name of the Trust and you buy units in the Trust by taking out a loan in the name of the Unit holder. You would then be able to claim the interest as a deduction and the rent would flow through to you by way of income.
Depreciation and Building write off work similarly.
Whilst there has been some recent discussion on HDT this mainly relates to case where the Trustees have the discretion to distribute income rather than having it as a matter of course.
The other concerning note in your post relates to the fact that you are looking at borrowing 100% of the purchase price. Whilst this is the traditional way of borrowing you need to be very careful that your lender does not cross collateralise the 2 securities.
Most lenders wil encourage you to do this as it gives them greater security but is certainly not a recommended course of action for an investor.
Structure them correctly and this will be the first step to what could be an enjoyable and profitable wealth creation path. Make your mistake here and it could be a costly one.
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
A Superanuation contribution is always a consideration.
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
Devo
I might be slightly confused and you may want to take the answer off the forum.
If i read it correctly is your IP loan fixed for 5 years and X collaratised. Depending on who it is with and what the interest rate was you may still be able to untangle.
Why would you not buy the next property in Trust ?
Asset protection is always important and there is always the secondary Tax consideration.
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 Matt
Regretfully Yes. Depending on the terms the MI company has with your lender you may receive a partial refund.
In saying this I am sure can switch products within your lender which may assist.
If you want to tell me who the lender is and what product you have we can make a suggestion or two.
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
What names are on the Contract.
If you joint names did you buy it as Tenants in Common (and if so what share split) or Joint Tenants.
Are you employed or self employed ?
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 David
Mhhhh you may have a problem and one of the reasons why am not the # 1 of LOC on your PPOR.
What i would be doing is switching the LOC to an interest only loan so that when it becomes your IP the interest can be claimed.
Attach an offset account to the loan whilst construction is taking place you can always switch it when the building is complete.I would need actual numbers to advise you further when it comes to your outstanding balance on your current PPOR to see if there is any way you can shift the burden of debt onto this property rather than you new PPOR.
Note doubt you are aware of the CGT implications when you subdivide your current PPOR.
All is not lost but numbers would help.
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
Cruzin
It is the only way to go if you want to build a portfolio.
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
Useable equity = Assume you have a house worth 100K and a loan of 70K and the Bank will go to 95%. then you will have
100 x 95% = 95k – 70k = 25K of usable equity.
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 Swift
It depends on whether you intend to be trying to claim some negative gearing benefits. You are unable to do this in a DT but an HDT will be able to pass the deduction up the line to the unit holders.
Main thing as Terry mentions is to uncross the 2 loans you currently have so to enable you to move forward.
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
Chez
LMI is a deductible expense so if it gets you into another IP quicker then it is just a cost of investing.
One thing to bear in mind is that you can access all of the equity in current property as most lenders will only go to 90-95% on a refinance. Make sure they dont cross collateralise the two loans and you can’t go far wrong.
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
Wanna tell us 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
Daryl
If you are worries about fees I would check the Suncorp Terms and Conditions.
We dont use them much as the service levels are not the greatest once it gets to HQ here in Brisbane.
The products are nothing new. Just make sure that they do not cross collarailise the loans as that appeared to be the main objective of your exercise.
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
Max Tax rate is actually 46.5% ($150K >) inclusive of Medicare levy but whats a percent and a bit amongst mates.
The concept is still the same why pay more than you need to in CGT if you do decide to sell them.
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
Passi
You mention you rbudget does not allow you to get into another area but have you considered a Shared Equity style of loan.
In essence you could buy a home of say $400K and only have to make repayments on $300K with the 2nd mortgage of 20% being interest free and requiring no repayments.
If you can put in 5% deposit the Bank will lend you 75% and then organise a 2nd mortgage for 20%. You only make you repayments on the 75% as normal and the loan of 20% is repaid once you sell the property.
The Bank take a share of the profit on the sale.
You could either buy into a property and reduce you repayments or keep you repayments as they were and buy into a more expensive property.
Either way you at least have choices on where to live.
Technically for owner occupied properties but who is to say that you rent it down the track.
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 we use either Deposit Access operated through QBE or GE ‘s Deposit Access.
Both products will go upto a maximum of 48 months.
Be happy to help with your application.
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
Devo
Only you knwo the area so I won’t comment there.
The figures appear ok and If you can do the work yourself saving $$$ then you will certainly add value.
To avoid a potential rate rise why not look at a fixed rate especially if you still have a PPOR loan. Assume you partner is not working so assume you will buy it in your name solely or in Trust with you as the Trustee and Unit holder.
Dont forget dont X collaralise the loan or the lender will have a field day with you. Fund it as 2 separate projects and keep the loans separate. You could always pre-pay the interest to get the full deduction into this year dependant on what you think will happen next Financial Year.
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
