Hi all
For the experts out there just have a few questions.My dad is going to be my garentor for my loan im going with westpac because he’s self employed and dosnt have much income on paper. Westpac don’t assess his income and won’t refinance his home.
His property is worth 430k and he has 220k on the loan.
My broker says that I will need to contribute my savings which is around 20k
My question is if I give my father the 20k to put into the redraw facility and after the loans settled take it back out will that work?
Brings me to my next question if your a Garentor do you have access to the funds that you have available in the redraw.
Guarantor
Why do you need to contribute $20k? Is it because of servicing or because of security?
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
Apparently there’s isn’t enough equity
If you have $20k to give your dad why not just use that yourself?
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
I can’t afford to service the loan myself so we are going with an investment loan and using a Garentor because 20k isn’t enough for the deposit.
This property will eventually be an investment property after I live in it for a year so a 100% loan would be ideal and bring the lvr down using property growth eventually removing my dad as GarentorIn that case you would want to borrow as much as you can and you should get some tax advice about how to maximise the loan (in conjunction with advice from your mortgage broker). I don’t really understand what is going on from your post.
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
I don’t really know how else to explain it,
He’s got around 120k available as a redraw can he access those funds even though he’s used that in congonjuction with the value of the property as security after the loan is settled?
Because if yes I will give him 20k so it increases his equity and I will not contribute anything to the house
Why are you going with an investment loan when you intend to occupy the property for a year ?
Wouldn’t you go for an I/O owner occupied loan.
You won’t be using potential rental income to get over servicing as you are living in the property.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Yes gift him $20k extra so you can borrow $20k extra could be a good idea – but get tax advice, especially on Part IVA
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
Thanks terry I’ll do that
And Richard in terms of your question I can’t service the loan hence using investment loan to increase borrowing capacity and once ive settled I’m moving into it and applying for first home owners grant
And Richard in terms of your question I can’t service the loan hence using investment loan to increase borrowing capacity and once ive settled I’m moving into it and applying for first home owners grant
In which state are you that you can claim first home owners grant after you bought the house and moved to it?
Do I understand correctly that you plan to tell the lender one thing (“it will be an investment and I’ll get $x in weekly rent”) but actually you plan to move in and tell the ATO a different thing (“it’s my home so no CGT should apply when I’ll sell it”)? 😳
Ethan Timor | Aligned Finance Pty Ltd
http://www.alignedfinance.com.au/
Email Me | Phone MeActive Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)
I’m not telling the ato anything I’m applying for first home owners grant because I’m eligible just because I purchase a investment property dosnt mean I can’t change my mind and decide to live in it hence why I can grant and stamp duty reduction.
And yes if I move in it after settlement for 12 months it’s seen as my ppor and I prove this then I can sell in 6 years without CGT but Thats not part of my plan at all
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