Hi,
I m about to do the big call around and thought I would ask here first to hopefully save me some time.
Does anyone know of any lenders that will lend against a company title?
I want to use the equity in my father in law's investment property (company title) as a deposit for a new investment property for myself.
The plan is to buy, renovate and sell – using the equity as deposit and my savings to fund the renovation.
The numbers stack up as long as I dont have to pay LMI, hence the need to use my inlaw's equity.
The original loan for the company title property is NAB, they don't want anything further to do with a company title.
Any help would be appreciated.
Thanks
Dear Dyna,
It will be good to appoint a mortgage broker in his situation.
You may be able to get lenders which will accept the company title, This will attract more legal scrutiny. Hence you may need to pay more application fee then normally. That is the reason it will be good to keep this tow loans apart. Refinance the IP then take money out of it and use this money in acceptable way into new property. The acceptable money transfer is bigger issue then getting a lender to company title.
Plenty of lenders will do company titles namely AMP, CBA, ANZ, Dragon and Westpac. An important factor is going to be LVR and postcode.
Also do an equity release against the company title property if possible and have your FIL gift you the funds. Its much cleaner than tying the property up.
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
I am doing one now. St George can go up to 85% depending on the security.
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
Thanks everyone for the replies
Yes agree there is no shortage of good lenders in this sphere.
Brisbane has a bit of Company Title in a particular suburb and we have never had a problem.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks again for all the responses.
I have another question about structuring.
TheFinanceShop mentioned doing an equity release.
What tax implications would occur when we sell the property and I want to pay my FIL back?
What if we were to roll the profit into the next deal?My accountant has recommended I set up a trust (planning to buy, renovate and sell a few properties over the next 2 years).
Would FIL need to be a beneficiary?Basically, I’m looking for the best structure that will minimise risk and tax for my FIL. He is a sole trader.
Any further help would be greatly appreciated.
Thanks.
Dyna
profits are still taxed, even if you roll it into a next deal. If a trust doesn't distribute it will be taxed on the top tax rate – 45%
If you want to access the equity in the property it can be messy depending how it is structured. If you had just borrowed money from FIL then little issue. If your FIL's propertyis used as security then he will need to consent to any increase in the loan. It would probably be better for you to wait until you have enough equity and removed him and his property and then you are on your won and can do increases as your please.
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
Dyna wrote:Thanks again for all the responses. I have another question about structuring. TheFinanceShop mentioned doing an equity release. What tax implications would occur when we sell the property and I want to pay my FIL back? What if we were to roll the profit into the next deal? My accountant has recommended I set up a trust (planning to buy, renovate and sell a few properties over the next 2 years). Would FIL need to be a beneficiary? Basically, I'm looking for the best structure that will minimise risk and tax for my FIL. He is a sole trader. Any further help would be greatly appreciated. Thanks.Bascially no 'structure' is going to protect your FIL because he would generally be giving a guarantee and allowing his property to be used as security.
There are ways to structure things so there is both asset protection and tax savings. Just bororw the deposit from FIL. No personal guarantees and no cross collateralising. If you go down he would lose the money he had lent you but not more.
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
Thanks Terryw.
I understand there is no way to fully protect my FIL. Rather I was looking for the best way to protect his assets and save him unnecessary tax costs.
At this stage, he is happy to be a guarantor and let me use the equity in his "property" as a deposit.
The gist of it is that I am about to talk to the lenders and I want to be able to advise them "this is how I want everything to be structured." Rather than hope they know what they are doing/will do the best thing by me and not them (not saying they would intentionally do the wrong thing, but I consult to banks and often they receive the most basic of training).
1. With that in mind, is there a best practice loan structure I should take?
2. If it's better to borrow the deposit from FIL, how would I do this, get him to refinance, LOC, etc?
I am definitely in the space of knowing a little bit but not enough to get me started confidently.
Thanks again
Dyna wrote:Thanks Terryw.I understand there is no way to fully protect my FIL. Rather I was looking for the best way to protect his assets and save him unnecessary tax costs.
At this stage, he is happy to be a guarantor and let me use the equity in his "property" as a deposit.
The gist of it is that I am about to talk to the lenders and I want to be able to advise them "this is how I want everything to be structured." Rather than hope they know what they are doing/will do the best thing by me and not them (not saying they would intentionally do the wrong thing, but I consult to banks and often they receive the most basic of training).
1. With that in mind, is there a best practice loan structure I should take?
2. If it's better to borrow the deposit from FIL, how would I do this, get him to refinance, LOC, etc?
I am definitely in the space of knowing a little bit but not enough to get me started confidently.
Thanks again
It will all depend on your individual circumstances and you should each seek your own specific legal advice.
The bank will have no interest in doing what is best for you but what is best for them – ie taking as much security and as wide a guarantee as possible.
If the FIl wants to lend you a deposit he could do this in several ways, best would be a LOC. But whether he could borrow and onlend would depend on the circumstances.
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
Hello Dyna,
I suggest here that you will consult for an expert Mortgage Brokers that could answer all your specific needs. There are many cases and different situations and I do believe that mortgage brokers could help you finding way out of it.
I hope that I help you here.
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