Browse Forums Home Finance Re: Using equity to purchase land 2Jun 19, 2016 7:45 pm Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: Using equity to purchase land 7Jul 06, 2016 9:25 pm Same goes for these 'guarantor' loans. NEVER EVER tie up my property for the kids. What happens if they divorce? (50% chance in oz, and I have 4 kids!), what happens if THEY default on the loan? My problem? Not likely. They need $$$, I borrow in MY NAME on loan separately and give to them as 'cash'. THEY make the repayments, otherwise they are OUT OF MY WILL. Real example, they needed 100k, I got 250k out, 100K for him and he makes repayments (on the 100k borrowed), I 'give' 150k to my finance broker and so far average around 12% pa returns. Which covers the 4.5% mortgage for the 250k at the moment. Anyway, so far has repaid 12k of the 100k lent. So far so good. I strongly encourage him to refinance once construction is complete to repay me in full. At that point I'll close and end out the whole 250k loan. BUT KEEP AVAILABLE BALANCE AS REDRAW (this is called a $10 mortgage, not quite paid in full) so when No.3 comes with her hat out, no need to reapply. Simple, clean and relatively risk free. At least limits MY exposure to their life dramas / default situations. The tax benefits here are obvious, as long as I continue to get a return that covers the whole loan amount. Good in a low interest rate environment. The biggest challenge will be if you take out a loan and then run out of money - you'll have an incomplete security and lenders do not like this so you can get stuck.… 2 19097 Broker here - legislation says that every true broker must put the clients best interests before theirs so in theory they must offer you the best options for you on their… 2 46013 0 2020 |