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That sounds about right to me. Being overseas, means you won’t pass mortgage insurance guidelines so would have to limit your loans to 80% LVR.
Terryw
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You cuold buy a cafe and rent it to your wife, and she could claim the rent as a deduction. But buying in your own name may not be the best way to proceed. So talk to your account. I recomend Dale too.
You maybe able to qualify for another IP loan, depending on how much rent you are paying and receiving, other debts etc. If you have some equity, you may be able to increase your existing loan to refinance the personal loan debt at a cheaper rate. $15k is a lot and may take years to pay off. Just do it with a split loan to keep it separate for tax purposes.
Terryw
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Sarah, sorry – I was typing while you were.
Terryw
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Torachan
You are assuming they are negatively gearing the property and that $100 is under makert value. Sarah, are you and is it? If so, …..becareful
I wouldn’t sell if it was me. Selling an asset that is performing well is only going to cost you money and you will miss out on all the future capital growth.
Terryw
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You should look at paying IO on your investments while paying PI into your home loan. You should pay off non deductible debt first. Maybe keep paying the same amount overall, but just divert most of it to your home loan. It will save you interest and increase your deductions.
Terryw
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It is harder on your own, but can be done.
With Steve’s method of not maximing out, you will have to go to lenders which do not ask you on their application forms whether or not you have guarranteed any loans. If they don’t ask, then don’t tell. But they will see them on your credit report and may ask questions.
Terryw
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Originally posted by maximus:Hi Maximus
When applying for low docs, the only proof of self employment needed is the ABN. They may also ask what sort of business you are invloved in and you will have to list an income.
When applying for an ABN, you cannot use a name, other than your own, unless you have registered that name with the department of fair trading. Many people just use their own names for business, and get an ABN.
Terryw
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[email protected]Hi again Terry, thanks for the info. Just to clarify, if I apply to get an ABN you said “they (lending institution)may ask what sort of business I am involved in”. What, in your opinion, would be a feasible response if I wanted the loan for investment purposes?? And, “they may ask for an income”, what income could that be? Could I put down rent received from I/P’s,(or would I put down the anticipated rent from the I/P that I am trying to get the loan for) if so, would this be ok with the ATO or would it not matter
Thanx for your help.
Marty
[/quote]Hi Marty
When registereing an ABN, you could indicate you are a property investor. But if you tell the bank you are a property investor, they may ask about all your properties. If you have been self employed as property investor, and don’t have any property, they may say you are not self employed at that moment.
Wiht listing an income. You will be required to list you current income from self employment and any rental income as well – usually separately.
There may or may not be a problem with the ATO. If you are declaring $300K pa and do not actually make this, then theoretically the ATO could issue you an amended tax assessment taxing you on $300K. You would then have to prove you did not actually earn this.
Terryw
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There are one or two lenders that do 40 years. One is GE Mortgages I think.
I agree with Steven. There would probably be no point in going for a longer term. It will be very unlikely that you will stay the full term with the same lender.
Terryw
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Have you asked the bank to do another valuation with someone else? Or have you provided them with evidence of other comparable sales in your area? A real estate agents letter will not be considered, unless it lists sales.
As a last resort, just tell the bank, in writing, that you are refinancing with X Bank due to a higher valuation. Most banks wish to keep customers from leaving, so that may convince them to order another valuation from a different valuer.
If that doens’t work, you may have to actually refinance.
Terryw
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Is the business making money? If you sell, you may get some money, but you will have to find a job or other income source. What about the costs of selling the business and/or house, have you factored these in?
Terryw
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Get legal advice. It shouldn’t be too hard to get a court order, and then get the sherrifs over there to kick them out,
Terryw
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Why not do both. Buy an home ot live in, live in it for 6 months and then rent it out and claim the deductions while paying cheaper rent elsewhere – and you will still be able to claim it as your main residence and hence CGT free status – if you do it right.
Terryw
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Don’t worry too much. The fine will probably be only small – about 12% pa of the outstanding amount.
Terryw
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Originally posted by maximus:Hi Terry.
Just because you have held an ABN for two years, won’t lenders want to see that you have been active with your “business”. By that I mean, can you just get an ABN to make it easier to qualify for lo-doc loans in the future, namely 2 yrs away. Also, when getting the ABN, what sort of business name would one have to submit, or could you just put “Joe Bloggs Enterprises” on the application form? Wont the ATO or future lender want to know at least what type of business you are running?
Thanks
MartyOriginally posted by Terryw:I guess it depends on how you define unemployed.
It would be a good idea to set yourself up now with a ABN so that you would qualify for a better grade of low doc/no doc loan. Most of hte good ones want to see 2 years history of self employment.
Terryw
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[email protected]Hi Maximus
When applying for low docs, the only proof of self employment needed is the ABN. They may also ask what sort of business you are invloved in and you will have to list an income.
When applying for an ABN, you cannot use a name, other than your own, unless you have registered that name with the department of fair trading. Many people just use their own names for business, and get an ABN.
Terryw
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I guess it depends on how you define unemployed.
It would be a good idea to set yourself up now with a ABN so that you would qualify for a better grade of low doc/no doc loan. Most of hte good ones want to see 2 years history of self employment.
There are private funds available for anyone with a heartbeat, but these only should be used after the cheaper alternatives have been exhausted.
Terryw
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Foundation
Yes, owning assets under a trust means they are not your assets, but belong to the beneficiaries – one of which may be you.
So if you go bankrupt, these assets are usually untouchable.
But if you have given a personal guarrantee, that is a totally separate matter. eg say you started a business in a shop under the trust. The land lord in not going to accept you as a tenant unless you give a personal guarrantee. Otherwise you could close the shop down tomorrow and he would have no tenant.
Terryw
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ATO determines a sale to occur when the contracts go unconditional. So extending the settlement won’t have any effect. Best to put it down to experience. I am sure you won’t make that mistake again!
Terryw
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Good post Mike, and some good points too. I wouldn’t recomend anyone to setup a hybrid trust themselves, also getting some good advice is a very good idea as you could save the fees in no time.
Terryw
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Hugo
by selling to your own discretionary trust you will enable the loan to be increased and the proceeds to be used at your pleasure!!. in effect it is like selling to a different person/entity. The new entitly (may still be yourself as trustee) obtains a loan to buy at market value. The trust uses this money to buy the property, and the proceeds of the sale go to paying out existing loans and the left over to your bank account. This money can then be used to pay down your new home loan, and the trust can claim the full interest on the loan (but only against other trust income).
Terryw
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Is a disability pension classed as taxable income? If so, then he could claim negative gearling benefits. But the amounts of tax saved would depend on how much income he is receiving – being a pension, i imagine it would be low.
Terryw
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