The Dark Knight wrote:
Essentially my work has a efpos machine i use it as if i've purchased something say $1000 and my boss gives me the money i take it to the bank and put it into my offset account. Its a win for him as soon as the efpos machine gets settled at the end of the night the money is in his account it also has less chance of been…[Read more]

Yes this is very common and works well for those on one of the professional pacakge because there are no additional fees for the credit card or offset (some lenders).

Speak to your accountant. You cannot contract with yourself, but you may be able to do it indirectly through a company. However this raises other issues -licensing, insurance, tax etc.

Yes, you could do that and yes it may be the way to go. If interest is deductible on the reno loan then refinancing generally won't change this.

But, will you need to pay LMI?

Dyna wrote:
Thanks Terryw.

I understand there is no way to fully protect my FIL. Rather I was looking for the best way to protect his assets and save him unnecessary tax costs.
At this stage, he is happy to be a guarantor and let me use the equity in his "property" as a deposit.

The gist of it is that I am about to talk to the lenders and I…[Read more]

If you are a resident for tax purposes then no change.

If you are a non resident there are big differences. No tax free threshold and the rates start at 30%+. You would also lose the 50% CGT discount.

Complex question involving several different legal issues – do you need a credit licence for example?

Think litigation – the owner of the property and the person behind it. Is it a good idea to get your mum involved?

There may be some private type lenders who will allow this.

Generally there are 2 problems

1. Second mortgage
2. lender nothing you have no money in the game.

Solution may be to use own funds initially and then borrow from the vendor at or after settlement.

Sounds like you may have recently done a course – be careful. This is good in theory…[Read more]

As a lawyer and broker I would say don't cross. I can see no advantages at all only detriments.

Dyna wrote:
Thanks again for all the responses. I have another question about structuring. TheFinanceShop mentioned doing an equity release. What tax implications would occur when we sell the property and I want to pay my FIL back? What if we were to roll the profit into the next deal? My accountant has recommended I set up a trust (planning to…[Read more]

Dyna

profits are still taxed, even if you roll it into a next deal. If a trust doesn't distribute it will be taxed on the top tax rate – 45%

If you want to access the equity in the property it can be messy depending how it is structured. If you had just borrowed money from FIL then little issue. If your FIL's propertyis used as security then he…[Read more]

Not correct againShelbyduck

If you are bankrupted a creditor may go after the trust assets. And they may be successful to a certain extent depending on the structure of the trust, terms of the deed and how it was used.

If a tenant sues the owner of the house then they will sue the trustee. If this is you your personal assets are totally…[Read more]

A trust is a legal person, but a relationship and only solicitors can advice on setting up trust relationships.

Some of your points are misguided. A trust cannot protect other assets you have for example. The asset protection aspects arise because a assets held by a trustee of a discretionary trust are not assets of any one beneficiary and…[Read more]

A person wants to know if they can borrow against property located in the US. I am not sure what KYC has to do with it- no not a form of lubricant, but Know Your Client (i imagine). So I guess he is saying that the potential mortgagor must go to the US to get a loan because Australia has a KYC policy and therefore Arun presumes the US must also…[Read more]

Arun Bhuta wrote:
Dear kevsgn,
In Australia a mortgage broker can not put application to bank unless then have done personal checks. Known as KYC.
Similar requirements will be there in US. Hence you could not avoid going to US that is my understanding, but you need to verify with mortgage brokers with US.
 

Another post which makes no…

Arun Bhuta wrote:
Dear Ynchai,

Early payment is required to be done but in Offset account. Hence to pay or not to pay is not the question but how to pay is question.

I am going to be rude and straight to the point!.

Arun, you don't know what you are talking about!. You are dangerous.

Yep. Avoid one big loan for 2 reasons:
1. Hard to apportion interest
2. Impossible to pay the the non deductible portion off first.

I would first look at some asset protection strategies and then consider paying down non deductible debt before reborrowing to invest.

All banks have these sorts of errors unfortunately. I remember I sold a property and still had a $150k LOC with the CBA for years – it is probably still open if I look into it.

I am doing one now. St George can go up to 85% depending on the security.