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You would have to talk to a solicitor really. But my understanding is, that when you are sued the first thing creditors do is a land titles search to see what assets you have. If they find some property, they may then search and see how much the mortgage is. If they see it is mortgaged up higher, they may assume you have no equity = no assets and stop there.
Even if they do sue you and get a judgment, the first and second mortgagees will have first priority. So if you were to go bankrupt, the property may be sold and your bank and the 2nd mortgage holder would be paid out, with the remainder divided between creditors.
It is costly and time consuming to bankrupt someone so if there is only a little money to be gained, it may not be worth it for them.
You really need a good solicitor to set this up for you properly.
Terryw
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Yearly, and its free!!!!
Terryw
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Sorry, that should have been
http://www.aussiestockforums.com/Terryw
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I use a discretionary trust. These are best for asset protection. Hybrids can be good but I think there is a risk of ATO disallowing interest deductions down the track, and they are also more complex and costly.
Terryw
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Cannot be done without stamp duty, or CGT. If you want to do it for asset protection there are other ways around it. eg. setting up second mortgages on your properties to tie up any equity.
Terryw
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Not from what I am seeing with valuations etc. One of my properties has just dropped 12% comparing a Jan 2007 valuation with Jan 2006.
Terryw
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Hi
It would depend on your level of cash deposit. If there is enough equity in the deal, many lenders would consider capitalising the interest. But you could also reduce the amount of cash put in and then use the remainder to fund the interest.
Terryw
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Cannot avoid stamp duty, but CGT is only lived on investment properties in the year of sale when there is a profit. If a person has lived in a property initially, then they may be able to avoid CGT even if the property has been a rental property.
Terryw
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And there is http://www.aussiestockforums.com.au for the shares
Terryw
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Good point Richard. Going to 95% LVR would be the same as selling after fees etc. But by selling you are killing the goose that lays the golden eggs – one less property growing in your portfolio.
Terryw
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Originally posted by duckster:You may have to investigate if Latrobe has done an adverse report on your credit rating because you are past your loan term.
Your credit report can be requested at http://www.mycreditfile.com.au
if you encounter problems Blue Stone will be able to assist you in this situation.Duckster Financial Services
http://www.ducksterfinancial.com
Helping to make the great Australian Dream come true !Comments are of a general nature and may not be relevant to your individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
They will generally give a short period of grace before they do this, but Denis shouldn’t leave it too long, just in case. As soon as you get the pre-approval Denis, notify Latrobe that everything is ok.
Terryw
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You can move in but you can only claim one property as your main residence at any one time and get the CGT free threshold. So the new property will be liable for CGT if sold in the future, but this will be for the first years while rented.
Terryw
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Originally posted by rpbrown:Terry, probably not which is why he wants to have a three way conversation with an accountant about the situation. Do you know if these ideas may have some merit? You mentioned super specialist. Not in the yellow pages so where do you find them?
N. Brown
Its alright to get a general idea from the broker, but don’t rely on it. I think you will find some accountant’s or financial planners specialise in super. Maybe some of the members here could recommend someone?
Terryw
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You could possibly set up a bare trust. You buy the house in your name with her as the beneficiary. You are in effect buying it in your name with her owning it. That will allow transfer of title without stamp duty issues, but it must be properly documented at setup.
If you jointly go on title you will be up for stamp duty on your exit. However, this could be minimised by you taking a small precentage of ownership.
Terryw
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Sorry, I cannot understand what you wrote. Did you end up paying extra commission? Usually if another agent sells a property, then they split the commission – you don’t pay extra.
Terryw
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Hi Tap
I wasn’t thinking about your borrowings, just you possibly incurring selling costs and losing tax free benefits. By selling your house you are only freeing up about 10% more equity. or to put it another way, you could keep your house and gear it up to 90% and still borrow to buy postive cashflow property – depending on your borrowing capacity.
Terryw
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You could try St George, They have good rates on their low docs, but LMI would be payable. Or Macquarie with higher rates . slightly, but no LMI payable.
Terryw
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Your home is the only CGT free asset you can have so giving this up is going to be costly. If you do decide to do it, maybe you could move into another property and then out again to take advantage of the 6 year rule for absences from your main residence – or maybe just rent out your current home?
Terryw
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Is your mortgage broker licenced to give super advice?
Maybe you should speak to a super specialist as things are complex in this area and once your money is in super it is locked away.
Terryw
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No, profit such as income and capital gains can be distributed at the discretion of the trustee, in a discretionary trust anyway.
With a hybrid, all profits should probably go to the unit holder to justify them claiming a deduction on interest used to buy the units.
Terryw
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