You probably have a binding contract if you have gone that far, so the ball is in your court.

I think you have the following options:
a) You can let me off without penalty, or b) let them off with an agreed amount or c) you can insist they settle as per the contract. If they fail to settle you can sue them for breaching the contract. You had better check with your solicitor. Not sure how much you could claim if suing but you should be able to at least claim for all the expenses incurred.

Good luck and let us know what happens please.

Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe” in subject line.

Macquarie are good, but they are securitised lenders which means all over their loans are mortgage insured. even LVRs of 1%. Macquarie usually pay the LMI so the client may not realise.

If you wish or need to start using No Doc loans you have to plan ahead. Virtually all No Doc (and Low Doc) loans are mortgage insured, even the ones with the big banks. There are only 2 major LMI companies and they have restrictions on how much they will lend. They also have policies on not approving your No Doc loans if they know your income and you cannot service. eg. If you declare a $50,000 income with, say, Macquarie on a full doc loan application, then go to RAMS and try to get a No Doc loan, you don’t have to give your income details. But if you actually need $51,000 income to service, the RAMS mortgage insurer maybe the same as the one with Macquarie, and they will know your income and they will have to decline your loan because they know you cannot service.

So that is why I suggest using the big banks first where possible. Try to avoid LMI. Then when you hit the limit, start to use No/Low Doc loans. If you were to do this, start borrowing in one name only (not jointly with a partner). This will greatly improve your borrowing ability.

Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe” in subject line.

And I should add, to make it even better, with a hybrid trust, my mate still could have claimed all the interest against his own income.

Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe” in subject line.

Bo, that may save a few hundred or maybe even thousand of dollars now, but could cost dearly later on.

I have a mate (just one[blush2]) that is earning $100K pa, while his wife doesn’t earn a cent. He bought a property in Perth 2 years ago, and put it in his name to save tax. He just sold it and has a $150,000 capital gain. But guess what, this all (after the discount) has to go to him. His poor old wife can get nothing, so he has to pay a fortune in extra tax.

At the time I advised him to look at using a hybrid trust. He didn’t listen! It could have saved him around $46,000 in tax!

Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe” in subject line.

You generally pay when complete, which may be years down the track.

Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe” in subject line.

I have seen a few of these groups form over the years, and can’t remember one that has actually done anything. Doesn’t mean your’s won’t, but just be aware the more people you have the harder it is to agree. Then there is the fact that some will work harder than others, some will contribute more than others and some will resent this (and other things!).

You should probably use some sort of trust, but be wary of using all names in one hit. These may eat up serviceability quickly. It may be better to set up one trust per person and have it so that each person can be a beneficiary. Start with one at a time, maybe the person with the highest income for servicing.

go to http://www.lawcentral.com.au and have a look at their JV agreement for the joint purchase of property. You will need something like this drawn up from the beginning.

Hope this helps.

Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe” in subject line.

Hi Trajik

I don’t have any experience with lending for these, but heard of LVRs around 60% and commercial rates.

I am not very impressed with these sorts of investments because of the lower LVRs, higher rates, difficulty in selling and possibly high management fees.

If you borrowed to invest in one, you would probably only break even and be hoping for capital growth. So you have to factor in the opportunity cost – you could be investing elsewhere and your borrowing capacity would also be adversely affect too.

Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe” in subject line.

The good old salesperson is not known to exaggerate!

I think they must have been talking about capitalising payments during construction. Which is possible, but you have to have the equity to do it. Sometimes it is possible, it just depends on the LVRs and your serviceability.

Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe” in subject line.

I think the only extra tax you may have to pay is Land Tax – and this would depend on the value of the land component of your property.

If your rent is less than your costs, then you could negatively gear the property – ie claim the loss against other income. And you should also be able to claim depreciation.

It would be a good idea to get a depreciation schedule done and a valuation done as well, for CGT reasons. Maybe also run the scenario by your acountant for some other tips.

Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe” in subject line.