Has anyone used an annuity program ie cash bond to help buy IP? Does it work or is it just theory?
Any advise would be appreciated.
cashpoorStill in SchoolMember@still-in-schoolJoin Date: 2003Post Count: 1,844
I know people use cashbonds, for purchasing IP, though still, you have to come up with the money in time. Most people who use this type of bond will use it on an OTP purchase which will not be built for a few years at least.
Though my understanding of annuity program is that you have a contract, but you have to pay a set amount of income anually, though this will depend on the policyholder, while their alive, not putting it bluntly but i dont know how well these will go down. Most annuity prgrams are designed for a retirement plan income.
Though back to the bonds and OTP, the idea is that they will sell the IP in time, when there is capital gain and use those funds to self fund their retirement. (self funded retirees)
Thank you for the reply.
CashpoorMJKMember@mjkJoin Date: 2003Post Count: 157
Thank you for your reply.Yes I am talking about using equity not deposit bonds & I got the idea from the navra site.
CashpoorTerrywParticipant@terrywJoin Date: 2001Post Count: 16,213
Somebanks will take annuities into account wehn assessing your income. The trouble is you have to be able to borrow to buy the annuity in the first place. You might as well use low doc loan instead.
And SIS, I think you have mixed it up. You pay the lender a sum initially and they give it back to you monthly plus interest.
The theory goes something like this:
You have $500,000 worth of borrowable equity, you borrow this and buy a $500,000 annuity over say 5 years. You will be repaid $100,000 per year plus interest, so maybe $105,000 per year. Some lenders will accept this whole amount as income – even tho it is mostly just your own money.
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[email protected]Still in SchoolMember@still-in-schoolJoin Date: 2003Post Count: 1,844
Thanks for the info.