Hi all, I need your opinion but let me start it off with the question; how should we finance our next property?
Here is the senario; my girlfriend and I live together, the house we're living in is literally paid off, we have enough cash in the offset account to let it taking care of itself with nil interest payment. We also have some extra saving sitting in the another bank earning interest but want to put it to good use.
The house is under my gf name and she has a stable job and I am unemployed and not too sure of the employment prospect.
We wanted to take advantage of the FHBG, before it run out, I assume it has to be under my name.
Now, how should we finance our next property? Thanks in advance.
Hi Redsun,
Things could be a little tricky if wanting to take advantage of the FHOG yourself. The requirements of the FHOG is that any associated party to the property has not previoulsy owned property. If you are not able to show any income, then you would be needing the assistance of your partner to be able to show sufficient income to service the required loan. Not a problem from the finance side of things, but now creates an issue with regards to the FHOG. Depending upon your own personal situation, a LowDoc lending option could possibly provide you with the finance you require. Of course certain requirements are needed in order to obtain LowDoc finance.
Regards.Hi redsun
I agree with Michael you wont unfortunately qualify for the First Home Owners Grant due to the defacto relationship with you both living together.
I assume you will be renting out your own property and purchasing the new PPOR with a sizeable cash deposit so if the property is in joint names i cant see a real issue.
Richard Taylor | Australia's leading private lender
Thanks Richard and Michael
Legally we're just friend and just because we live together does that make us legally defacto and no other way of getting the FHBG?
On the side note, if she is to buy an IP investment under her name, how should she go about for maximum tax return and finance benefit? Whats the tips and tricks? cheers
btw, we want the new property to be PPOR and turn the existing house into IP
The fact that that the current property is in Joint names will be the disqualifying factor as it was a PPOR for both of you (irrespective of your relationship).
All you would do is convert the existing loan to interest only as it will be an IP and you wish to maximise the deductible interest, remove the offset account and link it to the new PPOR loan.
If then you intend to purchase a further IP in your girlfriends name then might be an idea that you take out a separate line of credit on your new PPOR and Jointly you lend the funds to her for the deposit and acqusition costs.
Get you mortgage broker to make it a separate account so the interest can be easily identifyable.
Richard Taylor | Australia's leading private lender
Richard, no the current home is under her name, we hope to get the FHBG for a new property under my name.
you will not qualify for the FHOG as your spouse has owned property before. See my other post on the legislation
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
Cheers mate
michael k2 wrote:*snip* Depending upon your own personal situation, a LowDoc lending option could possibly provide you with the finance you require. Of course certain requirements are needed in order to obtain LowDoc finance.
Regards.…an income, for example.
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