Viewing 7 posts - 1 through 7 (of 7 total)
  • Profile photo of cashpoorcashpoor
    Participant
    @cashpoor
    Join Date: 2004
    Post Count: 22

    Hi everyone
    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.

    regards
    cashpoor

    Profile photo of Still in SchoolStill in School
    Member
    @still-in-school
    Join Date: 2003
    Post Count: 1,844

    Hi Cashpoor,

    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)

    Cheers,
    sis

    People 4get that by saving just $3 a day & investing it sensibly
    over a working life, you’ll end up with around $1 million

    Profile photo of cashpoorcashpoor
    Participant
    @cashpoor
    Join Date: 2004
    Post Count: 22

    Dear StillinSchool,
    Thank you for the reply.

    Regards
    Cashpoor

    Profile photo of MJKMJK
    Member
    @mjk
    Join Date: 2003
    Post Count: 157

    Cash poor,

    Check out http://www.navra.com.au
    Your talking about using equity not deposit cash bonds are’t you?

    MJK

    Profile photo of cashpoorcashpoor
    Participant
    @cashpoor
    Join Date: 2004
    Post Count: 22

    Dear MJK
    Thank you for your reply.Yes I am talking about using equity not deposit bonds & I got the idea from the navra site.

    Regards
    Cashpoor

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,110

    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.

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Still in SchoolStill in School
    Member
    @still-in-school
    Join Date: 2003
    Post Count: 1,844
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