I agree that Dale’s book is worth the money. It is written in a way the average person can easoly understand.

Terryw
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A bank cannot accept a guarrantee from you if you are not an owner of the property.

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You may very well be right. Lying on a stat dec would certainly be illegal. And there could be tax consequences ATO were to get a hold of your declaration where you have exaggerated your inocme – they might just beleive you and issue you with a notice of assessment on that income amount.

Having said that, what you describe is very common. There probably wouldn’t be too many low doc loans out there where people have put down the correct income.

An alternative is the No Doc loan where income is not required to be listed. These go to 80% LVR these days.

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This seems to be standard practice – charging interest on late settlements. Don’t worry too much, it is a small amount, and you would have saved a little bit in interest by having you loan start later anyway.

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If you buy an option over a property, then you can lodge a caveat on the title. This should prevent them from selling or mortgaging without your consent.

However, the bank can still foreclose on the property if they fail to pay their mortgage. Maybe you could ask to get copies of their monthly statements to make sure they keep paying, and maybe you could ask that you pay your rent directly into their mortgage.

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Yes, put a caveat on quickly while you sort this out. You will be able to do this as you have a family law matter. A caveat costs about $100 to put on, but you may need a solicitor if you do not understand what you are doing.

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Keep em coming Peter!

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Let me elaborate.

IO = Interest Only

100% offset account is a savings account linked to the loan. Money in the savings account is offset against the loan saving you interest.

eg. if you had a loan of $100,000 and $10,000 in the savings account, you would only be paying interest on $90,000 of the loan.

So having a 100% offset account and paying extra money in there would be the same as paying the money off the loan – same in terms of interest charged.

But there is one important difference. If you pay off an investment loan and redraw some money for non-investment purposes, then the extra interest on this withdrawal will not be deductible. Whereas if you were using a IO loan with offset, it would. This is because no money is paid off the loan, so withdrawing from the savings account will not be new borrowings.

But…. You will need to be discliplined. If you see all that extra cash sitting in a savings account, some people would be more inclined to spend it.

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You shouldn’t have any named beneficiaries in a trust, or the lenders may want a guarrantee from them. Seen this happen this week with RAMS. Man set up a trust, then changed the trustee to his mum, but he was a named beneficiary so the lender has asked for guarrantees from him as well as the mum.

From what I have seen, it is easier to just buy a new trust deed. Costs for changing it can be expensive as a solicitor has to review the document. If the trust already owns things, this may create problems too.

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What about keeping a certain amount in your account. If they want to see deposit (usually don’t these days), then show them this, but you can still borrow money from elsewhere. This may be hard to do if you want to use all your money for deposits, but it will also act as a buffer if things go wrong.

What about increasing the loan on your PPOR instead of selling?

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