Hey everyone,
This is my first post and am a newbie investor.I was just ‘re reading through the 0-130 book and am curious as to whether I can sell my existing house that has my name on the loan to a trust company that I am trustee for so that I can maximise my borrowings??
Jason
No dont do that!!
1. It won’t increase your borrowing capacity
2. You will have to pay stamp duty and may be liable for CGT as well.
3. It won’t increase your borrowing capacity :)Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
It’s good that you’re thinking about how to move forward!
I did a few things over my investing life that wer “borderlne” or tricky. Not necessarily by my own impetus, but becuase I was led to believed they were a “great opportunity” and so on.
I have learned that you have to stick well clear of the “line” and be on the side of the angels with regard to legals and tax.
It bit me in the bum more than once and I now listen a lot more to my wife, who is less stoopid than me for sure!
This isnt what you want to hear, but take heed anyway.
Dwight
Dwight
Cashflow Positive Investor
Totally forgot about CGT, thank you for that. From what I was understanding in the book is that if i have a property in my own name then try and use my income as () through a trust structure, then I can only still borrow up to my credit limit regardless of how many trusts i have or how it’s structured. Whereas if I have my current home in a Trust then that debt would only count against my lending for that one bank I have the mortgage through and not through other banks. So for example now i have a $300,000 dollar mortgage, and they will only let me borrow up to 560k then i only have 260k to play with no matter what bank I go with or what structure I have, But if this loan was in a trust then i could go to another bank and buy through the trust up to the full amount of 560k?? is that right?
My goal is to buy and develop land around Perth and make lump sum profits so that i can borrow again and acquire positive cashflow properties and in 5-7 years be fully dependent on the income from the properties. I work away from home and am looking to start a family soon with my partner so i want be able to stay home with her and the kids.
Hi Manley
Welcome aboard.
A trust structure isn’t going to enhance your borrowing capacity.
As Mick said – changing the ownership entity could be quite expensive too.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Manley
No hate to say transferring the property into a Trust will not enhance your borrowing capacity in most cases.
There are many other ways to increase how much you can borrow without the added costs.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Whereas if I have my current home in a Trust then that debt would only count against my lending for that one bank I have the mortgage through and not through other banks. So for example now i have a $300,000 dollar mortgage, and they will only let me borrow up to 560k then i only have 260k to play with no m
This is not correct.
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
Hi Jason
It’s good to ask these questions but the answer is no :(… I think the book might have to be updated.
Maybe your best bet is to talk to a mortague broker and see what stragedy
Suits you bestJpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
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