Forum Replies Created
Hi Achawk
Hate to say the issue is not that simple.
They cannot have the Title in their name and you pay the mortgage unless they can support the entire loan themselves thru their serviceability.
If the property is then sold in say 2-7 years they would incur the CGT on the partial or full sale to you.
You could look at a Rent to Own situation even if it was an investment property.
Must admit we are getting more and more enquiries on our Rent to Own property from investors who wish to buy with no money down and then rent the property thru a head lease.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Guys hate to say in this situation the property definitely will be a IP and therefore there is no Tax benefit.
Other consideration is serviceability irrespective of whose name the property is in.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Stenno
Depending on the location of the property an 80% lvr maybe possible even though it is a DHA home but remember lenders lend against purchase price of valuation whichever is the lower.
Just done a couple of SMSF loans for forum clients buying DHA and the valuations came back lower than the purchase price so be ready for that.
Also remember that whilst it might be a SMSF loan you still need to show sufficient serviceability so without knowing the full nuts and bolts of the deal i cannot tell you what i would do in your situation.
Personally i like to spread my risk and would probably serviceability allowing look at doing 2 smaller deals and still keep a cash buffer to diversify and cover any potential expenses.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Munz
There are a couple of ways around depending on how the property is held.
You could look to sell the property or buy the property from your spouse if it jointly owned or alternatively look to sell the property to a Unit Trust structure if owned solely.
Regretfully there will be some stamp duty payable but dependant on your marginal Tax rate and how long you intend to keep the property it could be well worth it.
As i say difficult to comment further without the numbers or knowing your current financial position.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
ASB hate to say you cant do Non related loan to the Corporate Trustee you need to do it to the Security Trustee.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Aus
No regretfully SISA legislation requires a single Asset to be secured by the borrowings.
i have a Commercial SMSF loan application going thru for a forum member who is buying 3 separate commercial offices and the lender is having to do 3 separate valuations.
Not sure which lender you are dealing with but in the main you can go down 50Kminimum for a SMSF loan.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Almost right guys the Crown has ultimate rights to recoup Land tax etc and then the Local Council for Rates and then the registered mortgagees starting at number 1 and moving downwards in the pecking order.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Mark i think what you will rent in Brisbane for $700 -$800 a week will be bit better in quality that the sort of property you would VF for the same weekly payment
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Land can certainly generate an income (i have 4 blocks in my SMSF which i lease out to a haulage company to store their heavy vehicles) so as long as you have the intension to either rent it out or can prove you purchased it with a view to constructing a dwelling on the land then you should be able to claim the interest and associated expenses.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Chanakya
Without having all of your personal details it is difficult to comment as to whether you should sell the unit or not (personally i never like to sell any property and built my portfolio on rental income) but either way assuming the new house is for your own occupation regretfully the entire interest bar $20,000 will be non deductible.
You should have structured the loan with a 100% offset account and that way you could have used the offset funds to cover the cost of the land etc and the interest on the entire amount owing on the unit would have been deductible.
I am assuming the unit is held in your sole name (not joint names) so depending on your marginal Tax rate you may wish to look at selling the property to a Unit Trust / spousal transfer and retaining the property.
As i say hard to comment further without knowing more.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Certainly you should be insuring the property the day you sign the purchase.
A good general insurance based Broker should be able to provide you with a suitable policy.
Secondly if you intend to develop the property in the future then ensure your lender is happy with multiple properties on a single title.
Be surprised how many are not great fans and you might be snookered.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
GOM your guess is as good as mine.
All i hope is they are separate loans and not cross collateraised as at least that way you can refinance one of the loans away and keep moving forward.
Personally i would clean it up now rather than later as they are not the quickest in the discharge department.
When you want to move forward last thing you want is your exiting lender on be on a go slow and find you can't purchase as you can't access your equity quick enough.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I have spent the last 15 or so years assisting investors with their loan structures and investment property acquisitions and never fail to be amazed at some of the ways in which over priced properties are sold and promoted.
The misconception that you must buy new to make it a good investment is merely a sales tool used by such marketing organisations hide their commission and marketing fees and they usually warm you up by telling you that Bank valuers are told to down value the property so when there is a variance between the purchase price and the valuation you are not surprised.
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Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Luke
Coming in late in the conversation couldn't help hearing the word MISA which means it is a Com Bank loan.
I would check and double check with your Broker / Banker it is the right type of MISA account as on that size loan you certainly aren't getting top rate discount so would want to make sure it is a modern day MISA and not the old non transactional style.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I have 1.1% with Anz but then i must admit my lvr is down 6.3% with borrowings now at $1.03M and security value at $20.3M.
If they offer you 1% take it an run.
With SGB we have had them offer 1% discount and waive the Annual fee but remember it is not about the now but about the future.
Anz Bank have one of the poorest serviceability models and accessing equity is a nightmare.
You are not going to find any Broker want to negotiate the deal on your behalf as he / she wont even receive the ongoing trail commission.
If you want to push forward with your investing then i would probably be switching lenders if you are happy sitting on your hands then stay put.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Viks Sorry why do you see LMI to be something to avoid.
Most successful investors accept the fact that LMI is an opportunity cost and if it means they can grow their porfolio that much quick then it is a cost worth incurring.
In most cases it can added to the loan so doesn't have to come out of savings.
Remember if you purchase a property for $400,000 you are going to need a lot more than 80K to avoid LMI as you will also need to have saved the acqusition costs such Stamp Duty, Mortgage Registration / Transfer etc etc.
One lender offers an unsecured line of credit at 90% at the same rate as the home loan and this can be used to cover stamp duty, renovation costs etc
I think as has been mentioned earlier buying with friends / relatives is fraught with issues.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Yes you are in good hands with Jamie.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
And there lies one of the problems.
New developers want residential rates and usually want to try and save on application, valuation or line fees etc.
Experienced developers realise it is more important to get the deal done and the overall interest rate and set costs are fairly minor in the scheme of things.
10% is about par for the course and with a couple of percentage in set up costs should be factored into the overall deal.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
With limited equity i cannot see any reason why you would not use LMI.
Just make sure you structure the loans correctly so they are not cross collateralized otherwise the premiums will be more expensive.
Also ensure your Bank or Broker spreads your LMI risk by using both LMI providers.
Be surprised how much difference there is between both insurers and between lenders using the same insurer.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Barney
Like Paul i have been involved in VF in Qld since 1996 but have to say in 2013 you wont find anything in Brisbane like that what you are requiring.
We pulled out of offering VF in Brisbane in 2005 and back then had a maximum loan of $175,000.
Even with current lower interest rates and based on the fact that you you could locate a Vendor or VF company to potentially take a deal over 25 years your repayments are going to be a lot higher than rent.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
