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If you are paying money, even from a loan account, to the trust then that is something that will work against you in servicing – whether there are losses or not. You will also have some legal and tax issues as well.
Sorry to dig up old posts. But what you’re saying is that there are potentially legal, banking or tax implications when paying off a lump amount (from personal funds) of a mortgage that is contained in a trust?
I was hoping to do this in order to use interest only or other loan options to minimise my outgoings (to ensure a positive flowing trust) but then pay off large amounts when possible to still shrink the debt over time. This would be especially handy during these times of high interest rates.Correct – but now, enter “the mortgage cliff”! There are a huge percentage of mortgagors whose fixed rates are due to expire by the end of this year. Thus another huge chunk of the populace who will face a near 140% rise in the Interest cost of their mortgage as they endeavour to re-finance, whether onto Variable or another Fixed Rate. Of course, like many others, they might also find they CAN’T refinance (with Qualifying Rates having been increased hugely over the last 12 months) so where will that leave them?
I’m hearing so much about the mortgage cliff and how its going to crash the market. Especially from the mainstream media. Not to be too tinfoil hatty, but I feel like when the mainstream media harp on about something this much, there’s usually an agenda, and the opposite of what they’re saying is true.
Now my question is, when these mortgage cliff victims have to sell their homes, where do they go? They still need somewhere to live. So they rent, propping up the rental market, or buy elsewhere, which changes nothing. So will the overall market really be hit that badly?
The only damaging argument might be if they all just bunk in with family members, or if it’s mainly investors who then sell to new owner/occupiers. But this probably will not make up the majority of cases.
Sent you a PM :)
Thanks for that link Benny. Lots of useful stuff that is a bit beyond my current comprehension level but I will do my best to break it down slowly and understand it all.
I tried calling through to the phone number in the book and it’s disconnected. The website has a form to fill out, so I did that. But not sure if they’d still be actively responding to forms.
really needing someone to guide me through this whole process and I’m more than happy to pay for a good professional. So far they’ve all told me it’s not possible but I’m not taking no for an answer!
Thanks Benny, yes I was very thorough in reading those pages specifically. It makes sense and it all seems fine and well until I go to my accountant/bank and they tell me that any trust that I’m associated with, whether I’m benificiary or trustee, it will show up on my credit score and affect my ability to borrow regardless. So it’s all very conflicting. Someone here is wrong and I can’t figure out who.
You make a good point that even if the tax savings balance out with the trust-related fees, it kind of works out to just be like an insurance policy in a way. I will take that on board.
Goals wise, as far as my deposits go, I believe that my income could allow me to save for realistically 10 investment properties by the time I’m 30 which is 8 years away, but I fear I will be capped out in terms of borrowing capacity by then. Hence why I’m so adement on being absolutely sure about what trusts will allow me to do.
Cheers for the insight Benny.
I was hoping for a bit more of an insightful discussion from the man himself than “If you can’t, you can’t. If you can, you can.” Shame. Thanks anyway Steve.
