You could sell your half to your spouse (if it was purchase in two names). Get a loan to do this and the proceeds would be put off your new home loan.

Or you could do as Michael and Kaye are doing and sell your house to your Trust. (see their post today).

Or
Steve Navra’s technique. It goes something like this:
You get a annuity with the purpose of increasing your borrowing capacity-together with a tax ruling. The money from the annuity comes from a LOC secured against the house. The income from the annuity is kept in a 100% offset account linked to your new home loan until you decide what to invest in. This is in effect a way of transferring the money to your new home loan.
I think his site is http://www.navrainvest.com.au

Terryw
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Steve

I think the point to the hybrid is to make the losses distributable. I am no accountant, but I think that discretionary trusts cannot distribute losses, but unit trusts can. A Hybrid is a combination of these two trust types.

There are apparently Hybrid Unit trusts and Hybrid Discretionary trusts. Both are slightly different, but I don’t know how they differ. There are actually sample trust deeds on Chris Batten’s site at http://www.chrisbatten.com.au

Terryw
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You don’t say what CBD?

I purchased a property off the plan and have just recinded the contract because it hadn’t gone up as expected (Melbourne).

I think now is probably not the time to be buying off the plan in Sydney or Melbourne.

Terryw
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Just think of how much money you could make if you used this money yourself. Eg if you used it as deposit on a property, a wrap maybe?

With this 2nd mortgage you would only make $4125 in 6 months. Do you have to pay any legals?

If you used the $50,000 as deposits on
– 2 wraps with a purchase price of around $100,000 how much would you make?
– 2 cheap buy and holds?
-one capital growth type property?

etc

Terryw
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DS

That name rang a bell. He has an advert in the latest Wealthcreator magazine (this is put out by Henry Kaye associated companies). His ad talks about creative finance strategies etc. Sounds interesting.

I beleive it would be worthwhile going to any free seminar (if you have the time). And please report back to the group.

Terryw
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Hi New Investor

Kangaroo Valley is one example and the Piction area as well (20% growth over last year or so)-And only 1 hr from city on the M5

Terryw
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Hi Nick
Here is a rough guide on LMI rates:
LVR Up to $300,000 $300,001 to $500,000 Greater than $500,000
0 to 80 0.35 0.45 0.69
80.01 to 81 0.46 0.58 0.9
81.01 to 82 0.48 0.6 0.93
82.01 to 83 0.61 0.78 1.22
83.01 to 84 0.66 0.84 1.32
84.01 to 85 0.78 1 1.56
85.01 to 86 0.85 1.09 1.7
86.01 to 87 0.93 1.19 1.86
87.01 to 88 1 1.27 1.97
88.01 to 89 1.09 1.4 2.19
89.01 to 90 1.19 1.49 2.38
90.01 to 91 1.32 1.69 2.63
91.01 to 92 1.37 1.76 2.73
92.01 to 93 1.47 1.85 2.92
93.01 to 94 1.59 2.04 3.16
94.01 to 95 1.68 2.16 3.33

Terryw
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hi Soma

I made a posting a few months ago about my situation.

The tenant was behind about 1.5 months. He knew he was on the way out, he lost his job, had no money etc etc. In the end, he just left one night – never to be seen again. I now have the debt collectors chasing him.

I wouldn’t wait too long. After being 2 weeks behind, ask them to start paying an extra $20 per week until they catch up. If they don’t send them a letter asking them to leave. That may shock them into catching up.

is this a wrap or lease option? Whih state are you in?

Terryw
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walkernick

I am a broker, but not in the office at the moment, so will try to dig out the info for you on Tues.

There are 2 different insurers-each with different rates, and then it differs whether it is onwer occup or investment. It is also a sliding scale-as the LVR goes up so does the percentage. And, some banks even mark up what they are charged from the insurers so it can vary from bank to bank.

Terryw
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APIM

I wasn’t talking about capitalising interest. it is kind of hard to exlain, especially on a forum like this. So I will try to give an example.

A)You have a LOC, balance Nil
A home loan, Balance of say $100,000
C) IP loan, IO balance of $100,000.
D) a 100% offset account linked to the home loan with $10,000 in it.

All rent and other income goes inot your Offset account (D) so that it reduces your non deductable debt.
The IP interest is added to the IP loan, and you pay it via a direct debit from (D) the offset account.
Now the good bit, Your rates for the IP are due, $500. You could pay them from the offset account, but doing this would mean the interest on you homeloan would increase as money comes out of the offset which is linked to the homeloan. SO YOU BORROW THE MONEY FOR THE RATES FORM THE LOC.

The effect is you can claim interest on the payment for the rates, while at the same time decreasing the non deductible debt on your home loan. This is like converting your non deductible debt into deductible debt.

You won’t make much of a saving (Eg $2000 in expenses per year = $120 in interest claimable = $60 saved???), but if you have a few properties, it can all add up.

Like Stuart said, I am a mortgage broker not an accountant, so not qualfied to give tax advice. And I don’t know how the ATO would treat this. Part IV A (anti-avoidance provisions) may apply-but I see this as borrowing for a legitimate business/investment expense. Beware! Would any accountants out there like to comment.

Terryw
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