Hi, I am new to the forum & will need weeks to read through the discussion info. I would appreciate your help with the following questions:
My son & his wife want to own a house but they are not qualified for a homeloan. Can I buy a house & use the wrap/Lease option to help them out & if so how would I do it? Is there another better option?
Cheers
H
Hey H,
you certainly can Vendor finance them. The trick is to decide what you want to charge them so you both feel confortable. Also you would want this to be contractual just in case things get messy. Often people think they won’t but it does happen. Another option is to lend them a deposit at an interest rate (also contractual) so they can buy the house themselves and carry most of the debt from a bank. eg. House for $200K you may lend them $25K at 8% and they borrow the rest from a bank. This will also give them a chance to get the FHOG. Maybe they could agree to repay you some of the loan with the FHOG which frees up more of your money. Going to the bank gives them a chance to start a credit history for the future (as long as they on’t stuff up). You could even ask for a second mortgage to be noted (solicitor) after the property has been bought and financed (so as not to get the bank antsy).Hope this helps.
Enjoy
AD [:0)]
(Andrew)“”Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world.”
Albert EinsteinThanks AD,
Say, using equity from my house I borrow 310K from Bank to buy a 300K IP + stamp duty. Repayment : $1800/month
I sell the IP to them for 310K, repayment = bank payment, currently at $1800/month .
For tax purposes I have to pay tax for the difference between their payment & bank interest
$1800 – Interest) * 12, building insurance & land tax of $700 because the house is still under my name. Can I claim tax on Stamp duties or any depreciations?I suppose they have to pay expenses such as council rates, water, house contain insurance and again stamp duty at the end of the loan term before the house is finally transfered to their names..
Can they get FHOG?
Cheers
Huey
Hey Huey,
Mate I still think that maybe the best option is to loan them the deposit then you are not carrying a massive debt. This will also enable them to get the FHOG to add to the deal. I think if it was me then I would go the way of deposit then if things did go wrong then I only have a small amount of money tied up in the deal.This will also give them all the responsibility for rates, etc.
Hope this helps.
Enjoy
AD [:0)]
(Andrew)“”Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world.”
Albert EinsteinMany thanks Andrew. It seems that I have to kiss my 70k super savings goodbye for a long time. Huey [
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$1800 – Interest) * 12, building insurance & land tax of $700 because the house is still under my name. Can I claim tax on Stamp duties or any depreciations?
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