Hi –
I currently own a unit, the mortgage is in my name only, I already received FHOG for 7k.
I only have about 15% equity as the mortgage (280k property value) is about 3 years into it.
My partner and I want to buy a house together (approx spend 280k) and then keep this unit as an investment property.
I was told I had two options – both options include saving 10 per cent deposit
1. get a second mortgage and have both names on the mortgage/title and not apply for FHOG (my partner has no properties but I do)
or
2. I could go guarantor for my partner to get a mortgage on his own, he can apply for the FHOG and have the title in his name only, but I can be the guarantor with the unit I already own.
But I dont know if I have enough equity to be a guarantor on a proprty and if I choose option 2 then I will only have the one property in my name only, therefore I wont get any TAX benefits as an investment property or will I?
Any help at all would be appreciated?! I really want to keep this unit as an investment for the future but I dont know the best way to go about it?!
Thanks!!
M79
moira,
Firstly when you say you have 15% equity do you mean at present you have a 85% lend against the current market valuation or15% equity to make the deal a 90% lend which is the maximum most lenders will go to on a top up as there is a big difference.
If it that you currently have a 85% lvr then i think you are going to find to access any equity at all.
Now regretfully your partner will not qualify for the FHOG anyway if you have already received it (check out the rules for Partners and Spouses in the OSR guidelines) so i think you need to consider that you will have to purchase the new property in Joint names and between you come up with the deposit and acquisition costs from your savings or a split loan to access limited equity.
Richard Taylor | Australia's leading private lender
Hi Richard, thanks for helping! I am very new to this, so forgive me if I give the wrong information…
I meant, the property was bought 3 years ago for 250k….. A friend who is a valuer said approx value of 270 – 280k now. I owe about 227k on the original loan of 237,500 (what i borrowed after deposit etc).
So I was thinking it was a debt of 227k on a property valued at about 270 – 280k? Am I totally looking at this wrong lol?
I thought that if I went guarantor on a loan for my partner, and its only his name on the title etc that he'd be able to get FHOG as I was only the guarantor? maybe not.
Thanks for your time! I think this site is great, that people help each other out
Hi Moira
No regretfully the available equity to borrowed against is 270K x 90% = $243,000 minus existing loan of $227,000 =
$16,000.You would merely pay the additional mortgage insurance premium charged on the increased loan amount.No unfortunately the FHOG conditions are quite specific that where a partner or spouse has already reeived the FHOG then the other party will not qualify.
Richard Taylor | Australia's leading private lender
@ Richard – Isn’t the FHOG only specific about this for married and defacto relationships. If moira is not married or in a defacto relationship then wouldn’t she be able to get around these regulations?
Ryan McLean | On Property
http://onproperty.com.au
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