Hi Kiwi

This actually happened to me a few years ago. What I did was negotiate with the agent to take a lesser commission (he wanted to save the sale and get at least something out of it).

In your case you may be able to do the same, depending on how much the shortfall is. You can get a copy of the mortgage throught the land titles office, so you know how much you are dealing with.

The owner may have got a 95% loan initially, and then an increase while the market was high. Then the market dropped.

There is not much you can do. Either give up or complete the purchase by putting in more money, and then chase the remainder from them.

You cannot just put something against their credit file. You will first need to take them to court, sue them, and get a judgement – should be easy to do on your own.

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Yeah, brokers shouldn’ advise on structures unless qualified in accounting or law, but they may be able to give some suggestions for you to research.

I think Steven from this forum is in Melbourne.

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try http://www.lawcentral.com.au
look at the buying a house togther agreement, etc.

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A caveat would prevent them increasing the loan or changing the loan type. Lenders will do a title search and find the caveat and will not, and cannot, settle while the caveat is still there.

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Some branch managers used to have, and maybe still do, the authority to approve loans up to a certain level of LVR and amounts.

These days, data is entered and the loan is usually approved by computer. If rejected, then it may be manually assessed. There may be some slight discretion, but not much usually.

Some lenders have LMI people actually sitting in their offices, and once the loan is approved by the bank, it must then be approved by the LMI person – if LMI is applciable

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Why not just read every post on this forum and save yourself $5000?

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You could do that. It would give them income in the short term, but in the long run they may be worse off. What if the property increases by $50,000 next year, or even the year after. They will have given this away in return for saving $600 or so per month.

THey have to work out if they want the short term income in return for losing any future gains. Some people do, others don’t really, but think wtaps are the secret technique to wealth (I was like this).

Questions
How likely is the property to grow in the next few years.
Do they need the income now?
How will the income affect their pensions, if any
etc/

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If one is your home loan, it would be better to keep them separate. Even if both are investment it would still be good to keep them separate. What if you wanted to sell one, or to move one to another bank later on??

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Toni, many deeds will be worded in a way that allows a company to be set up at any stage and automatically be a beneficiary if one of the trustees or appointers is a shareholder or director or office holder of that company. In this case nothing will need to be changed, and no minute would be necessary.

Changing beneficiaries can cause resettlement and this will result in stamp duty and CGT being charged on all the trust assets, as it is consided to be a new trust forming. This needs to be avoided at all costs!!!!

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Shouldn’t make any difference if it is an offset account or not.

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