Cornel

Since you have been living in your property, you could probably continue to class it as your main residence even tho you are living elsewhere. you can do this for 6 years as long as you do not class any other property as you main residence at the same time.

You could withdraw equity form you property and put it in the bank, but why? You would be lossing out as you will be charged around 7% interest, but will only be getting around 5%. You may be better off to leave it there until you need it. maybe set up a redraw facitlity now to get it all ready. You may also not be able to claim the extra interest on this as a tax deduction-depending on what it is eventually used for.

You will not be charged any tax on the equity that you borrow because it is not income, just borrowings.

Terryw
Discover Home Loans
North Sydney
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No losses can be distributed from a trust, including hybrid trusts. The losses will be calcuated each year and can be rolled over and overset against future income.

With hybrid trusts, there is a way around this by the unit holder borrowing to by the units in the trust. That way the ‘loss’ goes to the person rather than the trust. Since the trust is not paying interest, it would probably make a profit, this could even be distributed to someone other than the unit holder.

In your situation, if you have other investment income outside of the trust, then this can’t be offset against a loss in the trust, but may possibly be reduced by using the hybrid trust. If you only have losses, then these will just be rolled over.

That is my understanding anyway.

Terryw
Discover Home Loans
North Sydney
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Any trust can carry losses-I beleive indefinitly until a profit is made.

Troyid, maybe you company shares can be owned by a discretionary trust. All profit could then flow to the trust and from there distributed elsewhere at the trustees discretion. (possibly with franking credits).

Terryw
Discover Home Loans
North Sydney
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I beleive GE mortgages offer a 40 yr PI loan.

Terryw
Discover Home Loans
North Sydney
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Thanks guys!

Terryw
Discover Home Loans
North Sydney
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From the wrappees perspective, I beleive wraps are great. Many people would be paying much higher rates and huge exit fees if they went to a non conforming lender.

From an investors perspective, I have done a few wraps and probably wouldn’t do any more. The returns are not worth the effort and hassle. It also hurts your borrowing capacity by using your resources which could be invested elsewhere for higher returns.

Terryw
Discover Home Loans
North Sydney
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However, having many enquiries that you haven’t gone ahead with is not such a good thing. It is best to limit applications where you can.

Terryw
Discover Home Loans
North Sydney
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Mel. I beleive that knock backs aren’t recorded on the CRAA file. Only applications are recorded – it doesn’t indicate if you went adead, passed or were declined.

Terryw
Discover Home Loans
North Sydney
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There are also 2 books on trusts by an Australian guy with the surname RENTON.

Terryw
Discover Home Loans
North Sydney
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I agree, you could borrow to pay off your home, but the interest on these borrowings would not be deductible. It may give you piece of mind tho, having a clear title on your home.

Another thing you could consider is selling one of your properties to a trust. This would release the equity, but you would be up for CGT and stamp duty, so the interest saved may not be enough to justify it.

Terryw
Discover Home Loans
North Sydney
[email protected]