Hi,
Currently, I am working part time. If I get my parents to be guarantor, will I be able to get a loan in my name and purchase a property of about $300,000. I plan to buy one and live in it for about 6-12 months and then rent it out.
And will I have any problems when applying for FHOG if I use an investment loan (since it is for future investment purposes), or maybe I don’t need to, I could just get a normal residential home loan since my parents will be guarantor.
OSR says that they don’t see the mortgage docs when you apply. So what sort of docs are needed for the FHOG application if applied thru a broker. I belive they are passport, birth cert, transfer, frontpage. Do brokers show OSR the loan approval as well, therefore revealing that it is an investment loan or does it not matter?
If you indicate that your parents are helping you fund the purchase (i think there is a section that asks you this) will this affect the FHOG application?
And can you suggest any better arrangements to the above.
Thanks.
Hi magic
Couple of issues here but easily sorted out.
Firstly why are your parents going to act as Guarantors?
I assume that it is either to utilise their incomes in order to assist with your borrowing capacity or to utilise their security due to lack of deposit.
If it is the case that you are wanting the Bank to take their income into consideration then their needs to be a financial benefit to them and most lenders would want them to be on the Title. This is not what you want as you will be unable to claim the FHOG as they have already owned a property.
If it is for security purposes then would be no real problem as the family pledge style loan is fairly active and their guarantee would normally be limited to 20% of the purchase price.
I assume that working part time you may not be able to demonstrate a sufficient income on paper to satisfy the lender and would therefore suggest that your parent take out a loan against their property for say 20% of the purchase price and loan this to you.
You would then qualify for the loan in your own merits and their guarantee is not an issue.
FHOG would then become available to you on the basis that you satisfy the FHOG requirements in your State.
Now on the investment loan question most lenders will not load the interest rate or restrict the range of loan products availabel to you because you may rent the property out eventually so a residential loan would be the way to go. In saying this ensure that your Mortgage Broker structures it correctly for you so that you can benefit now and also in the future when it becomes an IP.
If in doubt or have a question feel free to email me.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
I’d suggest you ring the relevant department in your state:
For further information contact http://www.firsthome.gov.au or your Office of State Revenue:
ACT http://www.revenue.act.gov.au
NT http://www.nt.gov.au/ntt/revenue
SA http://www.revenuesa.gov.au
TAS http://www.treasury.tas.gov.au
AmandaBS
http://www.propertydivas.com.au
FREE online Property Resources“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”
Currently I don’t have enough deposit nor borrowing capacity since I am working part time.
My parents can take some equity out of their existing property/redraw from their loan to help me make up the rest of the 20%. And they simply just draw a cheque and pay for it on settlement, or do they need to put that money into my savings account first, and then I draw the cheque?
However, I still don’t have the borrowing power to be able to get the other 80%.
QLDS007 said “If it is for security purposes then would be no real problem as the family pledge style loan is fairly active and their guarantee would normally be limited to 20% of the purchase price.”
But I will need them to guarantee the 80% (less what ever I can borrow myself). How do I go about doing this?
Basically I only want my name on the title for FHOG, and therefore only my name on the loan if possible. If my parent’s name is on the loan as well, then the lender would want my parents to be on title as well right? At least 1% share on the title I think.
Magic
You maybe able to utilise a lodoc / nodoc style of loan. They do not need to guarantee anything and only your name would be on the title.
Your parents would need to draw the loan down and the funds would need to be ready for settlement. All depends on the lender whether funds are required up front with the application.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
But I only earn about 15,000 income a year at the moment. According to an online mortgage calculator, I’ll need about 40,000 income to be able to get a 240,000 loan for 80% loan for 300,000 property. So I am still far from that. or is it less with a low doc / no doc.
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