Just look for an accountant that can provide some good advice to go with the trust deed. Most accounants will just purchase these generic documents off the net. It is the advice that distinguishes them.

Terryw
terry@discoverhomeloans.com.au

What about stamp duty and mortgage stamp duty!

Terryw
terry@discoverhomeloans.com.au

That sounds reasonable I think. I’ve paid similar.

Terryw
terry@discoverhomeloans.com.au

You can certainly use the equity.

If you use equity and no actual cash, then the cash on cash return will really be infinity!

Terryw
terry@discoverhomeloans.com.au

I agree with Golfer. You should be eligible for a low doc loan as you are self employed.

When applying for the centrelink payments you will have to declare your income etc. There are now strict rules regarding companies and trusts, whereby even if you purchase in a company or trust the income will be attributed to you personally if you control the entity (ie are a director, trustee or appointer). So there is no real way to avoid this. for more info check out their web site.

Terryw
terry@discoverhomeloans.com.au

Someone asked me for an explanation of the abbreviations in my post. I’ve emailed back teh answer, but I thought I might put them here as well just in case..

LVR means Loan to Value Ratio (eg $100,000 property with a $90,000 loan = 90% lvr)

LMI means Lenders Mortgage Insurance. Banks generally only lend to 80% LVR so if you want a higher LVR, they will request you pay LMI and so teh LMI company has to approve you loan as well as teh bank. There are only 2 LMI companies which makes it hard sometimes.

PMI is the name of one of the mortgage companies. GE is the other.

Terryw
terry@discoverhomeloans.com.au

Did the bank manager include the potenital rent from the property you will be purchasing? From what I have seen of bank managers, probably not.

You could get a LOC setup to access some of that equity. You could then take the deposit for your new property from this LOC and go to a different lender for the main low. Some people use low doc loans when they can’t service anymore, they go to a different lender and jsut declare their income. No confirmationis done by the low doc lender.

Terryw
terry@discoverhomeloans.com.au

Just found this on the ATO site, regarding Superfunds lending:

“Loans/financial assistance to members or a member’s relative
Trustees are prohibited from lending money or providing financial assistance from the fund to a member or a member’s relative. The use of a fund asset by a member or a member’s relative for no cost or as a guarantee to secure a personal loan for example would be in contravention of this investment restriction.”

http://ato.gov.au/super/content.asp?doc=/content/17585.htm&page=8

Terryw
terry@discoverhomeloans.com.au

I agree with Melanie and would like to add there are considerable tax benefits to a trust as well. There is a good book written by an accountant called ‘Trust Magic’, available at:
http://www.gatherumgoss.com/

Terryw
terry@discoverhomeloans.com.au

There are various products such low doc loans where you have to state your income and no doc or asset lend loans where it is not even asked. You generallly have to be self employed for around 2 years for low docs (get an ABN now!).

Asset lends can be done on the value of the property alone. I know of one product at 85% lvr with a rate of 9.5% (+ hefty upfront fees). Another at 65% at around 7.45%.

There are also private lenders that lend based on valuation only. Rates are higher, but if you can find cheap properties, you may be able to get 100% finance, but it is extremely hard to do, and also hard to convince a valuer to value the property higher than the contract price.

Low doc loans start in the low 6%s at 80% LVR and range up to 10.15% at 90% LVR.

Terryw
terry@discoverhomeloans.com.au