We're still waiting to hear back from the bank and the mortgage broker about financing for our subdivision project. The lady at the bank said they would require personal guarantees from the directors of the corporate trustee of the unit trust we will set up to lend to the trust, even though it will probably come in at under 60% LVR based on a conservative estimate of final project value. As some of us are thinking about upgrading their PPOR or building IPs on the subdivided land, I am concern about the effect these guarantees will have on further borrowing capacity, as each guarantor is held joint and severally liable. Is this likely to be the case?
I not sure if all unit holders need to be directors of the corporate trustee, so some could be excluded from making the guarantee. Is another alternative to inject enough extra equity (on top of the value of the existing property) to make the bank happy lending without guarantees. Is this likely/possible in the current environment?
I not sure if all unit holders need to be directors of the corporate trustee, so some could be excluded from making the guarantee. Is another alternative to inject enough extra equity (on top of the value of the existing property) to make the bank happy lending without guarantees. Is this likely/possible in the current environment?