Is there anybody out there who could advise me as to the following:
1/ Is it true that buying a property with others, actually reduces your ability to borrow more later. For example I own a
50% share in a investment property. (Market Value $315,000, LOC Loan Balance $148,000 and Credit Limit $252,000).
I've heard around the traps that when applying for finance on a further property, that only half the rent will be credited in my
favour, but the whole loan balance will be counted against me. To make matters worse, I've been told that its not just the
whole loan balance, but the full credit limit that would be counted against me ?
If this is true, how could I have improved the situation ? If I had only taken a seperate loan for my 50% share of the property
would that have improved my situation ?Tanks in advance
Yes that is true. It is because legally you must continue paying for the loan if the other person doesn't – you are jointly and severably liable. And for tax reasons you only get half the rent.
There may not be a way around it other than not buying jointly where possible. This is especially so when husband and wife are buying property together using No Doc loans – having both on the loan halves the borrowing capacity – and doubles the risk.
Taxation issues must also be considered in conjunction.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
so dose it mean if we are going to invest together with my friend, it's better that we borrow money seperately?
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