Yes you could ‘lend’ them the shortfall and you could secure your loan by a second mortgage. They would need permission from their lender to do this as title would change at settlement. It might be easier, for them, if you secured this against their other property – better for you against both of their properties.

Make sure you seek legal advice.

Pity the link in the first post doesn’t work anymore as if we had the address we could have done an RP data search.

Think of the dangers that are out of your control
death
family law
incapacity
bankruptcy
running away

of the other person.

I had a client approach me where the female invested in a property with a boyfriend. She used her parents house as security for the purchase. After a year or so the boyfriend did a runner. She had to keep paying the loan as if she didn’t her parents house was on the line. The house they bought had dropped in value as well. When an owner disappears the property cannot be sold as they will need to agree to sell it. So an application to the supreme court is needed to appoint a trustee to sell it. This will cost around $40k. But as it has dropped in value the sale price wouldn’t meet the loan amount. So the only way to discharge the mortgage would be to pay the bank cash, or to keep the loan going secured by the parents property. This means the parents couldn’t sell while the loan is going.

If the property had suddenly increased in value I bet the boyfriend would have resurfaced.

Sounds like the caused their trust to lend money to a building company. Eddie – the trustee have security for the loan, any personal guarantees? It is highly likely you will lose the lot, if no security, so be careful will spending big on lawyers.

You can try http://www.certuslegal.com.au/

Do you have a fixed loan?

Benny is right. Cash withdrawals attract no interest free period.

Yes that is possible in theory for a security guarantee. you won’t find a lender willing to take you as an income guarantor – or at least it will be very hard.

Nathan Houareau wrote:

Hello everyone
When it comes to wraps who is supposed to pay for the council rates, the water rates and any wrap insurance?
Kind Regards
Nathan

That is up to the parties to agree on. It would generally be the wrapee

You not only need an option agreement but a contract of sale. The terms of the eventual sale need to be determined up front. You will also need a lease. If you are trying to get your tenants to pay rates and other expenses you need to be careful because under the residential tenancies act, in some states, these costs may not be passed on to a tenant by a landlord.

I wouldn’t be using an online template for an option agreement. I am a lawyer but still wouldn’t prepare my own option agreement because it is not my area and I know it is very complex – for example your tenant may need to pay stamp duty in certain states and that could kill the deal.