Could you please rephrase that?

Are you saying you want to distribute income to a company (wihtout actually distributing it?), and then teh company loaning the money back to the trust (wihtout actually any money changing hands?). And you don’t want it to show up on the company tax records so the company doesn’t pay tax on it?

I don’t think you can do that (if that is what you are asking?). Any income of a trust that is not distributed, will be taxed at the maximum rate of 48.5% (trustee will pay this on behalf of the trust). So the money will have to be distributed to someone. You can distribute it to the company which can hten loan it back to the trust, but the company will have to pay tax!

I am not an accountant!

Terryw
terry@discoverhomeloans.com.au

Marie

Yes this is common and good to do if you have enough equity. Then if the bank doesn’t give you what they want, just go to antoher bank. Most people like to do it the other way round, make their home debt free-itmakes them feel safer.

BTW did you mean pawn?

Terryw
terry@discoverhomeloans.com.au

Paul

Hi, I think property is fairly safe. It is very hard to lose money with property (but not imposisble). Since you have a lot of equity, you could do a lot of property investing. But maybe you could buy one and see how you go, if it works buy another etc.

I have done 6 wraps using a real estate agent. I haven’t even seen the proeprties and have made a good passive income and capital gains as well.

There is alos the possibility of doing a jv with someone that renovates property. This may be a bit more risky though.

You could also just use a buyers agent to source a buy and hold and just go for capital gains.

If there is any problems, other people (such as property managers, tradespeople etc) can handle them. I don’t even know how to change a light bulb and am doing all right!

Good luck

Terryw
terry@discoverhomeloans.com.au

Brizza. That is correct, the bank has to cover themselves if you don’t pay. They can foreclose on you and sell the property, but there is a chance that they won’t be able to get what you paid for it and aslo costs involved, so they give themselves a margin of around 20%. They are willing to take a lower margin, if you pay their insurance for this (lenders mortgage insurance). You can now actually borrow 100% of the price if you are willing to pay 2.6% of the purchase price in mortgage insurance. Then if you don’t pay, the bank can forcelose and anyshort fall is covered by the mortgage insurance. (They will then come after the borrower to try and recover their costs).

Terryw
terry@discoverhomeloans.com.au

Banks generally like you to be employed for at least 6 months. For 95% loans you will have to show genuine savings of at least 3% of the purchase price (if you can get FHOG). There are 100% loans available for owner occupiers, conditions are tougher and include being in same job for at least 12 months.

There are various products available including asset lends where the lender goes purely on the value of the property (up to 85% lvr). No income required. There are also low doc loans at 80% lvr where you just declare your income with no proof (or checking) required. (people have been know to exagerate their incomes!).

If you can keep comming up with 20% deposits, then you can keep getting loans.

Terryw
terry@discoverhomeloans.com.au

Windel and Stu

Let me guess, they wanted to take a charge over the company as well as personal guarrantees? Or was it a Hybrid trust?

Terryw
terry@discoverhomeloans.com.au

I personally will never fix again. It makes you trapped to the bank. very hard to sell or to refinance without paying penalties. I know people who had had to m=pay more than $20,000 in penalties from breaking a fixed loan (house sold due to divorce settlment).

Terryw
terry@discoverhomeloans.com.au

Brizza, No you can’t. Just add up the total value of the property and the total value of loans and multiply by 90%.

You may be able to go to 95% though.

Terryw
terry@discoverhomeloans.com.au

Comdom

You can’t just transfer you properties to a trust. They will have to be sold to the trust, this means CGT and stamp duty implications. Do some figures, it may not be worth it.

Really you should be talking to an accountant about this. You would probably need a Discretionary trust or a Hybrid discretionary Trust.

Terryw
terry@discoverhomeloans.com.au

I am in Sydney, but the agent is in Victoria. feel free to email me.

Terryw
terry@discoverhomeloans.com.au