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From: Littlemaze
I have a dilemma and hope you gurus can provide a spark of genius so I can make a decision and finally get some sleep at night!!
I want to buy a $170,000 house with my 2 siblings as tenants in common with all having an equal share. I am exploring ways to structure the loan. The options I have thought of are:
1. Take out a joint mortgage between the 3 of us. However, I believe the banks will hold each person liable for the entire loan amount (joint and separately liable) and only recognise 1/3 of the rent for servicability.
2. Brother and sister use their equity in their PPOR and I revalue all of my portfolio to release the required equity. If I use my own equity for the new house it will lock my equity up. I won't be able to leverage off the new house in the future as my brother and sister want to keep the new house unencumbered.
3. My sister and brother use their own equity from their PPOR and I take out a 1/3 mortgage the new house (I may have to convince my brother and sister to let me do this). I'm not sure if any bank will do this as how does the bank get clear title to the house as security?
My preferred outcome is to mortgage the new house but limit my mortgage exposure to only one third and protect my brother and sister's share in the property if it all went to mud.
Thanks in advance.
Littlemaze
I have a dilemma and hope you gurus can provide a spark of genius so I can make a decision and finally get some sleep at night!!
I want to buy a $170,000 house with my 2 siblings as tenants in common with all having an equal share. I am exploring ways to structure the loan. The options I have thought of are:
1. Take out a joint mortgage between the 3 of us. However, I believe the banks will hold each person liable for the entire loan amount (joint and separately liable) and only recognise 1/3 of the rent for servicability.
2. Brother and sister use their equity in their PPOR and I revalue all of my portfolio to release the required equity. If I use my own equity for the new house it will lock my equity up. I won't be able to leverage off the new house in the future as my brother and sister want to keep the new house unencumbered.
3. My sister and brother use their own equity from their PPOR and I take out a 1/3 mortgage the new house (I may have to convince my brother and sister to let me do this). I'm not sure if any bank will do this as how does the bank get clear title to the house as security?
My preferred outcome is to mortgage the new house but limit my mortgage exposure to only one third and protect my brother and sister's share in the property if it all went to mud.
Thanks in advance.
Littlemaze
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