Hi all..
Would like you opinions on the following situation:
Girlfriend is looking to buy house. Purchase amount will comprise of around $100k from her mum, and around $100k from a loan in her name. Her mum will live in the place, and pay my girlfriend rent (half of what the house could get). When her mum’s financial situation improves (2-3 years), she will probably buy the other half of the house from my girlfriend, or they will sell it and split the money. Will this situation work out? What issues should they be considering? I am assuming the gf wont get a first homebuyers grant as she wont be living in the property (she will be living with me, still paying rent).Hi Milo,
Are your girlfriend and her Mum both going on the certificate of title as joint borrowers or tenants in common?
It’s easier if the answer is no. Your girlfriends Mum will need to provide a statutory declaration saying she is gifting the $100K towards the purchase, then providing your girlfriends record is clean she will have heaps of options for lending as an investment property (without getting FHOG unfortunately) and at only 50% LVR it shouldn’t matter whether you tell the banks the indicative full rent expected or the half-rent that the girlfriend would receive.
If the answer is yes then it’ll probably be better to go as tenants in common and see a broker because there aren’t too many lenders who’ll regard this loan as standard hence giving them the best possible loan rate and features.
Good luck!
[
]
Mel
[email protected]Is there any way she could get the FHOG? I guess however if she could then it could be no longer claimed as an IP?
What does ‘tenants in common’ involve?Good news is that there will be no mortgage insurers involved so it wont be too difficult to be creative.
If your girlfriend was to be on title alone and occupy the home during the first 12 months she will be entitled to the FHOG. It is suggested that this should be for 6 months.
If she never lives in it then she will still be entitled to the FHOG when she does buy her own home.
If she is on title as Melanie suggests then she will be able to rent it for full market rent and then negative gear the property until it is sold.
Because the LVR is 50% then as long as she has a clean record we can gurantee a loan – even a NODOC in worst case.
I think the main concern is that the relationship and the agreement hold up. Many people express concerns about family disagreements etc. I know I wouldn’t hesitate if it were my mother!
All the best,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
]
You must be logged in to reply to this topic. If you don't have an account, you can register here.
