Go back and have a look at some of your old magazines such as ‘your mortgage’ etc. Look for old predictions and see how many get it right. I don’t think it is very many!

Terryw
Discover Home Loans
North Sydney
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I agree with the others that you have to be very very careful – especially in this market.

One thing some people don’t realise is, even if you can onsell before completion you will not get you deposit back, or the profit until the whole project is complete and settlement occurs.

Terryw
Discover Home Loans
North Sydney
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I replied to a similar post a few weeks ago.

You could sell you share of the house to your spouse, and he/she could borrow to do so – deductible debt. The money released would be tax free and could be used for your PPOR. You may not even have to pay stamp duty on the sale in some states.

or it may be better to sell to a trust as Steven suggested.

Terryw
Discover Home Loans
North Sydney
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You are just looking in the wrong areas. You have lots of options open to you such as:
– Lenders that allow business add backs (may not work for your case)
– Low Docs
– No Docs
– Pure Asset lend type loans where they don’t care about your CRAA, Income, Asset levels etc

Terryw
Discover Home Loans
North Sydney
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Yes, these sorts of loans are not cheap – probably 10-12%. But these are only short term, so once you finish you can refinance or sell off etc. You wouldn’t need additional security, but the valuations have to stack up.

Terryw
Discover Home Loans
North Sydney
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Hi Michael

You can substitute security, but it is hard to find something around the same price that will settle on the same day as your sale.

However, Some banks like the ANZ will give you up to 3 months to find another property – they will take keep the loan there waiting.

Terryw
Discover Home Loans
North Sydney
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100% offset can work very well if you ever move out of your home. Just pay the minimum off you home loan/interest only and plough all of your money into the offset. This will have the same effect as a LOC, but probably at a cheaper rate. Then if you move out, you just take the money out of you offset and plonk it into the new offset attached to your new home loan. The result is the interest on your old loan goes up and interest is saved on the new one = massive tax benefits.

This wouldn’t work with a LOC as the money would be coming from the loan account = borrowing, and since it si being used for non investment purposes, the extra interest would not be claimable.

Terryw
Discover Home Loans
North Sydney
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Hi Greg

I haven’t done this myself, only have theoretical knowledge!!

I suppose, the worst thing tha can go wrong is they stop paying your loan. In that case, you have a second mortgage so your fairly secure – if the values were as expected. You can take legal action to get your money back, and in the end could probably foreclose on them. But I don’t know what would happen if the kept paying the main loan, the first mortgage and not yours. Maybe you would have to get the first mortgage holder’s agreement to foreclose.

If the loan is for personal purposes and not business/investment, then the loan would be regulated by the UCCC (uniform consumer credit code) and you would have to abide by all the regulations such as issuing statements at certain interevals. If it is not regulated, then probably you don’t have to issue statements, but if it is interest only, it will be easy to do anyway. You better talk to a solicitor about all of this.

Terryw
Discover Home Loans
North Sydney
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I think joh wants to buy a property and rent out the spare rooms to his mates (and have girls over!!).

Sounds like a great plan to me!

And I think the plan of buying a property is great too. It all depends on how strong your income etc is for getting the finance.

Terryw
Discover Home Loans
North Sydney
[email protected]

I had a client in a similar situation. This seems to be common in the IT industry and some banks will treat you just like an employee. BUT if your contract is ending soon, they won’t like that.

Terryw
Discover Home Loans
North Sydney
[email protected]