Hello everyone!!!
As a first timer in this website, I would appreciate for your expertise in regards to my dilemma below:
1. I’ve just purchased a property in December 04 & would like to be a guarantor for my boyfriend as he’s currently looking for a property for himself as well. Can I act as a guarantor now or have to wait a bit before I can be one? The reason being, we would like to avoid paying mortgage insurance (without having 20% deposit).
2. Which bank or financial institutions in NSW would allow him to borrow the maximum amount?
3. Otherwise, can I refinance with my lender in such a short period of time?Looking forward to hear from you soon.
Many thanks- vivaarTake care
ReneeYou could try to negotiatie with the vendor of the new purchase to carry back a second mortgage on the property for 20% ….. then try for the lenders.
Cheers,
KiwiLooking for Positive cashflow solutions?
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We are investing in NZ so if you are looking for + cashflow properties…contact: [email protected] to join our database.Guarrantors are generally frowned upon these days – unless the guarrantor is benefitting from the loan. Spouses are often an exception. But not being married, my make it difficult so you may have to go on title to guarrantee his loan.
Whether you can use your existing property as additional security for his loan will depend on how much equity you have.
So what did you buy it for (or what is it worth?) and what is your current loan?
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
Click below to email meTerryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Vivaar
Mortgage insurance is not all that bad, besides you can claim it back as a legitimate tax deduction, and that way you can keep your properties separate.
For me personally, I would never go guarantor for anyone. Please think of the worst possible senario, like boyfriend defaulting on loan, you are then responsible for not only paying your own loan but someone eles’s mortgage all because you said you would guarantee payment. Lot’s of senarios come to mind, just be very careful before putting your name on anything.
Good luck
Jenny1
Hi Vivaar,
Jenny is totally right, be very careful with the Guarantor. see all the lender suggest people who will be guarantor to take leagal advise before they enter into the contact, becasue the worst case, that is like you give a $300k additional credit card to somebody else. If they dont pay, the debts is yours.
Plus if this is his first property, he can get FHOG $7000. if you are being his guarantor, you have to declare that you are de factor then he is not eligible for FHOG anyway as you being his de factor currently own a property in AUS.
You could refinance your loan and release the equity as a line of credit for investment purpose. If you have an agreement to lend your bf that money is better than you go on the loan to be the guarantor, coz you only have the risk losing maybe 10-15% of the property value.
Or if your bf doenst mind that $7000 FHOG, you can go tenant in common on the property do a JV.
Hope it helps..
You could set up a joint venture partnership for a single property. If the property is cashflow positive then you should not have to many issues getting finance… unless you are trying to come up with the 20% that the bank will not cover.
If you have equity in the property then you could access it to provied the 25% that the bank will not lend you and register a second mortgage on the investment house as you really need to secure your interest in the property. Then you could perhaps find a lender that accepts gifting and then you are away.
Looking for Positive cashflow solutions?
Look no further
Wraps-Lease Options & JV’s
http://www.kiwilogic.biz
We are investing in NZ so if you are looking for + cashflow properties…contact: [email protected] to join our database.Hi everyone!
Sorry about the late reply.Many thanks for your reponse & advice. I’d definitely keep it in mind re being the guarantor for my bf. I’d definitely reconsider on that note…
To answer Terry’s question, I purchased the place for $315K in Dec-04 and haven’t done any valuation on the property as yet. My current loan is $240K.
Also, is it too soon to refinance?
Your expert advice would be appreciated. Thanks.
Take care
ReneeTake care
ReneeHi Renee
80% of your property price is $252,000. It may have gone up since Dec, but probably not much.
That means you have about $12,000 equity which you can use without going through mortgage insurance. So if you were able to use your property as additional security, then your boy friend could buy a property up to about $60,000 – if he had money for costs.
If the property is worth more than you paid for it, or you are willing to pay LMI you can go much higher.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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