Forum Replies Created
Hi Amit
It is a very generous offer from Terry but thats the sort of guy he is.
Just remember to sell a property using an instalment contract these days (Wrap) you need to be licensed and the requirements wont be covered in Steve's kit.
Forwarned is forearmed.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Bella
Firstly welcome to the forum and I hope you enjoy your time with us.
Certainly never put yourself in a position where you do not feel you will be able to service the ongoing debt however correctly structured you maybe able to have your cake any eat it.
You could look at buying the property as either Tenants in Common or in your husbands sole name so he claims all or the majority of the deductions. Of course not every property is negatively geared and if you look at the cheaper end of the market in order to dip your toe into the water you might find little difference between the net rent and the interest repayments.
Get your mortgage broker to look at options such as prepayment of interest for a year especially if you feel the following year your income may be reduced. Also you might want to thing about splitting up the loan between fixed and variable in order to remove any concerns that interest rates may rise.
I never suggest to clients they cross collateralise the 2 securities so limit the exposure your PPOR has and look to gear against the IP just in case. Flexibility is key and remember the loan should work for you and not your Bank / lender.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Yes he can.
Most development deals are funded that way.
CheersYours in Finance
Richard Taylor | Australia's leading private lender
I never wish to put the dreams and aspirations of a young investor down but in the current climate on $42K per annum even if you live at home paying no rent or board you wont finance a shoe box.
Credit scoring is going to hurt you and you will probably need a minimum of 10% savings to get past Go on the first property.
Never the less dont give up and adopt some of the sensible advice already been given in previous responses.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Moxi
As Jamie mentioned Wesuck withdrew their NO lmi policy a couple of weeks ago and i agree that ING are a shocker on refinances.
Citibank might look at it as they have an excellent no problem "cash out" policy but you have to decide what the funds are to be for. The interest will not be deductible if you put it into your offset account but would be if you used the funds for a deposit on the next IP.
Sounds to me like you might need a bit a loan review so to be clear of what your short term and longer term goals.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
SNM
If in doubt i would be getting a private binding ruling.
I have done a couple of deals where i have purchased a block of units in my SMSF zoned multi unit dwelling and then strata titled the block changing the zoning to residential and sold off some of the units.
In each the Fund was fully audited and never had an issue.
Must admit i dont agree with the comments made in the paper if that the case and in the main seem to relate to borrowing of funds thru a Security Trust. This is a different matter. My comments were not made in relation to the fund taking out borrowings unless done thru a related party / Trustee loan.
As Trustee you cannot control local government decisions to rezone and therefore could not be held responsible.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi PPR
Yes you can swap the houses but CANNOT claim a Tax deduction on the increased loan merely by refinancing the property as interest deductibility is based on the purpose and not the security.
As i have said on this forum many times before you could borrow funds for investment secured against a pogo stick and the interest would be deductible.
Depending on how much time you have on your side, in which State the PPOR is located and how it is held (i.e solely by you / jointly etc) will depend on your options but any change is likely to incur some form of cost i.e stamp duty.
Again without knowing all of the facts and figures it is difficult to make comment but if you are wanting to investigate I would put a stop on your refinance application immediately.
Hopefully your Bank hasnt given you any advice to this effect.
If you decide merely to go ahead with the purchase accepting the fact that you cannot claim the additional interest further consideration needs to be given to the loan structure. You do not ideally want in that case the 2 securities cross collateralised.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Closer
Normally if the $400K is treated as a capital reduction you would have the choice of reducing the pricipal amount and keeping the monhtly repayments the same or reducing the monthly repayment.
Depending on the lender not a big deal.
Course whether you would pay down the pricipal is a different matter my preference would be pop the funds in an offset account and give youself some options.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
No problems in doing a development as long as the SMSF is not seen to be running a business.
Dont worry Trent be suprised how many of people in the industry have no idea about SISA legislation.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Kate
Alternatively look at a lender that does not charge LMI or waives it at 85% lvr.
A combination of both has to save you money upfront and maybe a cheaper interest rate and better structure along the way.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Sorry Trent that is clearly untrue
Firstly you can only purchase a completed house not house/land where by the super fund buys the land and builds
I have done many of these in my SMSF.
Funding the deal maybe a different matter but again that can be acheived albeit a bit around the houses.
You can purchase vacant land, construct, renovate etc as long as all such investments are covered off in your Trust Deed or the Trustees agree to such an strategy.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
bastian hate to say your average Banker has absolutely NO credit discretion whatsoever.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
As long as you havent ever occupied the property and havent owned a previous property in which you have lived you will get the FHOG however the Stamp Duty concession is slightly different and will depend on the OSR in your State.
Qld for example is a definate no on that front.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Yes own several properties in my SMSF but either manage them myself or have a local property manager look after them.
Never heard of EZ/
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
http://www.bsa.qld.gov.au/Pages/BuildingServicesAuthority.aspx
Ph:1300 272 272
Hope this helps
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Would ring the Building Services Authority in your State and see what they have to say.
If it is a structural problem i am sure your Builder will cover it.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Yes it is and i think Steve has clarified this point on a couple of ocassions over the years.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Mark
Nothing to stop you doing it but is it wise is a separate issue.
Considerations would include Stamp Duty, possible CGT, asset protection (assume the Company would be the corporate trustee of a DFT) land Tax, borrowing costs etc etc etc.
If you are thinking of doing it merely because you believe you can borrow more then i hate to say that is a myth that doesnt fly.
As Trustee / Director you have to disclose those debts that you are standing as Guarantor for and it doesnt increase your borrowing capacity (Odd case where there is benefit).Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Yes if the property is for investment.
As you mention becomes a loan cost deductible accordingly.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi James
Can certainly recommend Jamie as one who knows his onions.
It is funny you mention your FInancial Planner who didnt own any property himself, i make the same comment to my clients.
How can your mortgage broker recommend a loan structure for going forward when he hasnt even paid off his own PPOR.My sister in law lives in Orange and understand property is certainly on the move down there.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
