Hi Eden

LOC is a Line of credit. doesn’t have to be a LOC, you can use any sort of loan,

Capitalising interest is justting the interest build up, not paying it everymonth. – This may be wise in some cases as you could possibly use your money elsewhere.

Terryw
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You had better use an accountant if you are not sure.

Stamp duty on the land is not deductible. It can be used to reduce the capital gain when you sell, but not claimable while you have the property. But I beleive the situation is different in Canberra with leasehold properties.

Similar with solicitor fees.

Some other costs are considered borrowing expenses. These can be claimed, but only over 5 years (ie 20% per year) or the term of the loan – whichever is shorter.

Other costs can be claimed in full – if related to an investment property.

Terryw
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V8ghia, Although hard to find, they are still out there.

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I have heard about them, never financed one tho. From memory, LVRs are about 70% and the lenders do not like them

I think there are problems with selling the unit too, as the new purchaser may have to be approved by the other owners as well. this will limit the price. But as tools suggested, if you can change it to strata, then could makes some quick gains.

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Maybe you could get him to sign a longer lease in return for you paying – with a small increase maybe?

Or maybe he could just get wirelss broadband.

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Mortgage insurance has a huge impact on low doc loans as virtually all mainstream Low Doc loans are mortgage insured. With some the lenders charge the clients the fee, while with others they incorporate the fee into their rate and/or exit fees.

This means that you will have to pass the LMI criteria as well as the lenders criteria. Postcodes may be restricted, total loan amounts, overall exposure levels, previous disclosed incomes etc.

There is 2 main LMI companies and 2 or 3 other smaller ones. So often changing lenders will not help you, as they will be using the same LMI company.

There are a small number of loans that do not have LMI at all for Low Docs. eg. ANZ, Adelaide, ING, and some others.

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It would not be possible to raise finance the usual way. Usually the person on the title has to be the one on the loan. You may be able to find a private lender willig to take the risk, but the risk for them would be very large ~ it would basically be an unsecured loan.

In this situation maybe you could talk the owner into taking all risk and you take a consultant`s fee.

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I know of a 85% Asset lend, 3-12months, rates from 12%, fees are rather high though. Best avoided it possible.

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Colin has covered it weill, but i would suggest you get some legal advice. You shouldn’t be signing a contract without having it passed by a solicitor – you could be locked into a purchase you may regret.

As for the and/or nominee it is always good to use, but just be aware you may still be up for stamp duty in Vic if you do not have a written agreement with your nominee dated before you sign the contract. eg. you sign and/or nominee, then X comes along and you nominate him. You will have to pay stamp duty on your purchase and so will X – unless you had a prior agreement.

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