looking to invest in a 3 way split on a property.
everyone has to pay an equal amount of the loan,
problem is
one guy has 40k
girl has 15k
i have 20-40kso has anyone done this, and what is the best way to do it? obviously guy with 40, is going to want to put down a bigger deposit.
Is a % investment on the loan an option?
Divide the loan/property into say 5 shares?
2 guys have 2 shares, and the girl has 1 share???Several options
1) Purchase the property as Tenant in Common and allocate the shares according to the deposit.
2) Purchase the property using a Unit Trust structure and allocate the Units according to the deposit.
3) Purchase the property using a Pty Ltd Company and allocate the shares in the Company as per above.Remember whichever way they go the Bank will have them all jointly and severally liable for the entire loan amount.
Richard Taylor | Australia's leading private lender
Does each party want to own 1/3? If so, do they have the borrowing capacity to make up the difference in their deposits? Essentially, you have between $75k & $95k as a deposit. You will need to determine how large an investment that you are all prepared to make – eg 80% geared $375-$475k range, one or more properties, each person's capacity to pay mortgage & whether this is reflected in their current level of savings?
Will this be anyone's PPOR? Is the FHBG applicable?the other 2 can apply for first home owners grant,
I cant
what happens there??richard out of options 1,2,3, they all look good. But i guess which would be the simplest, easiest, cheapest option.
Would we need an accountant to help up set that sort of thing up.
How much does a company cost to setup? We might be better and easier all putting in 15 each = 45 deposit, and get something with that, to keep it equal thirds.
Its just that we all have different incomes, so we could all afford to pay different amounts.Obviously the smaller depositor shouldnt get an equal third, that why i ask about shares, they would own say 1/5, and the others own 2/5 each.
If your name is on the title to the property then they will not qualify for the FHOG.
If it is purchased as an IP then they will still qualify for the FHOG when they purchase their own PPOR down the track .
Tenants in Common is the cheapest way to go.
Richard Taylor | Australia's leading private lender
If your name is on the title to the property then they will not qualify for the FHOG.
If it is purchased as an IP then they will still qualify for the FHOG when they purchase their own PPOR down the track .
Tenants in Common is the cheapest way to go.
Richard Taylor | Australia's leading private lender
Another factor to consider is splitting the loan accounts into 3 separate accounts.
Whilst this can be done with most lenders Colonial (CBA) have a specific structure which requires for each owner to individually service their own loan account. (Richard doesn't like this lender)
Each owner of the property must guarantee the others loan however the bank does all the structural work setting up the the loans.
All loan types and packages are still available.Hi Craig
No i dont like the lender for a variety of reasons but many lenders do similar.
Both Citibank and SGB allow the loan statement to come out in the individual partners name although they all guarantee the total loan. You therefore have 3 splits each in a single name.
Richard Taylor | Australia's leading private lender
As already mentioned, there indeed are several lenders happy to split loans and issue statements (for splits) in various names. Please do not however underestimate the seriousness of the fact hat IF you plan to buy more property later, this will make it virtually impossible unless the property is cheap, or you are on filthy high incomes, as lenders do see the whole loan as YOUR responsibility as far as liabilities (and thus servicing) go. ie. $300k house, you all have a $100k 'loan split' each, but you also all have a $300k liability.
All the best.
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