Greeting to all the gurus in this awesome forum. I am currently living in Cairns, anticipating of moving back to Sydney for family reasons. I have a FHOG mortgage of $110,000 with HomeSide Lending(through a mortgage brokers while on casual employment) which I purchased 2000 – owing $95,000 (borrow $10k 2001). I also have a personnal loan of $15k plus credit value ($5000 – owing $3k). I want to purchase another house in Sydney ($350,000) together with my sister and brother, ( Hoping to use one of them for FHOG) How can I use my current house to get finance to persue this move. Sydney house would now be a principal property and Cairns the IP. Both siblings are renting ($250wk & $150wk) separately with secured employment ($50k & $40k) but zero deposit. It would probably take me 3-4 wks to find a job. I have a car (worth $10k-15k) so as my brother. Each siblings have credit cards debt of ($8k & $10k). Could this be done, says a trust or joint trust or something? Do we have a chance of persuing this dream and if can? – How?
Blackmarlin,
I doubt you would be able to include yourself on the loan if your brother and sister are first home buyers coz it would make it null and void for them. I think that is right. I mean, I filled out the FHOG form the other day and it asked if any party to do with the house has owned a house before and if they did, well then it was no good for the others.Go and see a mortgage broker and they might be able to give you proper advice that you can act on. They’ll know all the ins and outs of things. Just make sure it is a registered broker.
Sorry my post wasn’t that helpful, but hey….
Cheers
Steph.Success is 1% inspiration and 99% perspiration.
Thanks Scremin – you are right regarding FHOG as my involvement will void my siblings application. My understanding of the FHOG rules is that the property can be rent for no more than six years, then either I move back in or sell it, to escape maximum CGT. (correct me if I’m chasing my own tail). My first step now is to arrange for a valuer and see how much (deposit) equity I can redraw or opt for a refinance. Am I on the right track so far? ..[upsidedown].. overload and confused!
Can someone else care to comment about the rest of my last posting or am I in the wrong room OR am I not ready to take that first step until I sort out my personal debt? Come on – hit me guys![whistle]Hi Marlin,
I suspect you have confused the 6 year PPOR CGT exemption CGT rule with any restrictions that may apply to the FHOG, mind you I have never had the need to read FHOG legislation so I may be wrong.
The 6 year rule as it applies to CGT states you can largely only have one PPOR at any one time – there are a few minor qualifications to this when moving houses are involved. If you do only own one PPOR then you can rent it for six years without incurring CGT.
Under the scenario you have discussed I suspect you will miss out on FHOG for your siblings because of your involvement in the Cairns property and also CGT exemption because of your name being on a new PPOR residence in Sydney.
In terms of ownership it is possible for the three of you to form a simple tenants in common structure.
Under this arrangement it is possible for ownership to apportioned in accordance with your collective wishes, who brings what to the ‘table’, or respective finances, or even according to who fights hardest – the reason can be entirely up to you. Eg 33.3% each, 40/40/20, 98/1/1 etc.
Obviously a trust is also a possibility where unit in the trust could be bought in proportions similar to the tenants in common process.
In terms of finances the three of you have an achilles heel – the amount of potential credit card debt available to you. A lender will consider these cards to be fully extended – even if the card has never seen the light of day apart from when you opened the letter.
As Scremin indicated a discussion with a mortgage broker is advised. At the moment you have missed some of the important details that will be required to provide reasonable discussion.
Namely your level of income and also the value of your Cairns property. And then, depending upon the answers provided you may be in a position of being able to release equity from your Cairns property (this part of your Cairns debt now being non-deductible) and using it on/towards a deposit in Sydney.
Based on a $350000 property in Sydney – collectively you will need to find $70K for deposits (based on 80% lend) and an additional 5-6% for purchasing costs (~$18K).
Further research and information required Marlin.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Marlin
To enable your siblings to obtain the FHOG, you could perhaps use the equity/security of your Cairns property to enable them to purchase. It could not be in your name.
You could then perhaps ‘rent’ a room from them, so that they have more income to use to service the loan, and you still keep the CGT exemption for your PPOR because you are not owning another PPOR. My ideas, definitely would need to do further research to see how viable it would be…..
Cheers
Mel
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