I made an offer on a property over the weekend and the contract is now with my solicitor. My brother and I have agreed that we would go 50:50 on the property like we did about 5 years ago. The property is $650K.
However, from financing point of view, I need to know whether it is best to add my name to the contract (on the title) before signing the contract.
So here is the background:
Me, married with one child:
PPOR: value $800K with $500K loan in joint names with hubby
Combined income: $60-70K pa gross
Income through parents tax free status: $20-36K pa gross. We distribute our business income by way of franked dividends to my parents as they are both retired and do not have any other taxable income.
Cash, Shares & Managed Funds: $150K
Brother:single with no kids
IP: value $800K with $400K loan
Income: $150-160K pa gross
IP income: $30K pa gross
Cash, Shares & Managed Funds: 250-300K
Our Plan: We plan to purchase more properties together. However, we have agreed after a certain period (3-5 years) one of us would buy the other out as we did with our first purchase together about 6 years ago. We would like to purchase again together in about 2-3 years time when this property becomes cash-flow positive.
Legal Danger: We understand that our circumstances may change, and one of us may get into financial difficulty but we have our parents who have said that they will alter their wills to compensate anyone who may be taken advantage of.
If the property goes in my brother's name and he gets married we plan to lodge a second mortgage or caveat on the property to protect my/our contribution to the property.
So from a financial point of view, not legal, is it best to add my name to the contract or not?
However, from financing point of view, I need to know whether it is best to add my name to the contract (on the title) before signing the contract.
So here is the background:
Me, married with one child:
PPOR: value $800K with $500K loan in joint names with hubby
Combined income: $60-70K pa gross
Income through parents tax free status: $20-36K pa gross. We distribute our business income by way of franked dividends to my parents as they are both retired and do not have any other taxable income.
Cash, Shares & Managed Funds: $150K
Brother:single with no kids
IP: value $800K with $400K loan
Income: $150-160K pa gross
IP income: $30K pa gross
Cash, Shares & Managed Funds: 250-300K
Our Plan: We plan to purchase more properties together. However, we have agreed after a certain period (3-5 years) one of us would buy the other out as we did with our first purchase together about 6 years ago. We would like to purchase again together in about 2-3 years time when this property becomes cash-flow positive.
Legal Danger: We understand that our circumstances may change, and one of us may get into financial difficulty but we have our parents who have said that they will alter their wills to compensate anyone who may be taken advantage of.
If the property goes in my brother's name and he gets married we plan to lodge a second mortgage or caveat on the property to protect my/our contribution to the property.
So from a financial point of view, not legal, is it best to add my name to the contract or not?