Yes you certainly can have 2 trustees and both can provide personal guarantees.
But think forward – do you intend to buy more property inside and outside the trust? This may actually hurt serviceability depending on your situation.
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
right.
Yes I do, but I was under the impression that I could create new trusts when i've reached the maximum possible lending capability of a particular trust.
Could you suggest any decent texts to read on this subject?
You can create new trusts but this won't help with servicing if the same people are giving guarantees.
There are no books on this sort of thing. For structuring in general see The Trust Structure Guide 2012.
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
many thanks:)
Just wanting to put it out there…..
In this forum there are some seriously smart people. It's like getting paid advice for free. Thanks I have learnt heaps…since not sure which way to jump…time will tell.
That's what the forum is all about sharing information with other interested property investors.
Hope you stay around to enjoy all the forum has to offer.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Terry could you give a example of how having 2 or more directors all giving personal guarantees would hurt serviceability moving forward.
Am i wrong in thinking. Person A, B and C have signed personal guarantees. Net loans in the trust 1.5 million all for investment purposes. Person A then wants to go off and buy their own PPOR or do their own individual borrowing in another trust or in their own personal name. Their income is only 75k but the group total income was 250k.
Does this then mean that if your using the same bank they will say… You have given a personal guarantee for 1.5 million your income of 75,000 is not enough to service any future loans.
Is this avoided by going to another bank. Cant remember i have ever been asked if i have given a personal guarantee for another trust
thanks wilko
Hi Wilko
No hate to say it doesn't matter whether it is the same Bank or a separate lender.
Any guarantee you sign will be taken into consideration when assessing serviceability going forward.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Richard
Assessment of serviceability for a SMSF though would that still be independent of personal guarantees given?
How about Low doc loans as well?
thanks
Hi again Wilko
Assessing a loan for a SMSF loan has no bearing on your personal liabilities.
Loan is assessed on a couple of things:
1) Your employer's superannuation contribution. (If S/E your average voluntary contributions)
2) If Fund is an existing fund the growth in the year.
3) The anticipated rental income from the property being purchased.
Course it is not quite as easy as all that.
In regards to a lodoc loan then all liabilities have to be declared.
The only difference is that you are not required to produce the normal documentation when ii comes to Tax Returns etc for verification of income.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Just to extend on the above point – assessing a loan for an SMSF loan has no bearing on your personal liabilities unless you are going above the 9% contribution. Then you will be required to provide your full personal asset and liability position.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
wilko1 wrote:Terry could you give a example of how having 2 or more directors all giving personal guarantees would hurt serviceability moving forward.Am i wrong in thinking. Person A, B and C have signed personal guarantees. Net loans in the trust 1.5 million all for investment purposes. Person A then wants to go off and buy their own PPOR or do their own individual borrowing in another trust or in their own personal name. Their income is only 75k but the group total income was 250k.
Does this then mean that if your using the same bank they will say… You have given a personal guarantee for 1.5 million your income of 75,000 is not enough to service any future loans.
Is this avoided by going to another bank. Cant remember i have ever been asked if i have given a personal guarantee for another trust
thanks wilko
Hi wilko
I was thinking along the lines of esch guarsntor beingnliable for the whole debt they have guaranteed. So if a b and c guarantee a $1mil loan by a trustee then if a went to borrow for something in his own name then he would be assessed as having $1mil in debt.
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
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