Equity deposit using wife's property

Hi everyone,

Looking to purchase another IP and trying to organise the best way to structure finance.

PPOR is in wife's name (asset protection purposes) with CBA and we have enough equity to cover the deposit (second loan to pay balance will be secured by IP)

I want to purchase this in my name- is it possible for me to get a loan to cover deposit and closing costs guaranteed by equity in property held in her name?

Is this the best way to structure it or is it better to get a line of credit to pay deposit and closing costs?

Will we have to use the same lender to do each loan or am I able to continue with Bank SA if I choose?

Thanks,

Luke
 
You can draw equity from your wife's property easily enough, either through a spousal guarantee or a joint loan for the equity access.

You don't want to cross collateralise the two properties together whatsoever, so the two properties need to not be tied to any single debt.

The equity release would be through CBA, however the purchase can be through any lender that you prefer. CBA + BankSA are both early in the spectrum for the order of lenders to use when building an investment portfolio, so either may be suitable dependent on your current lending exposure, borrowing capacity etc.
 
Thanks Corey,

So by setting up a loan for the deposit against the PPOR and another loan against the new IP they won't be crossed?

Thanks
 
You would probably get your wife to get a LOC in her name only and to lend you the money with a writen commercial loan agreement so you can claim the interest.

If your wife cannot borrow because of serviceability then consider a joint loan.
 
Thanks Corey,

So by setting up a loan for the deposit against the PPOR and another loan against the new IP they won't be crossed?

Thanks

That's correct, the deposit loan will be solely attached to the PPOR, while the IP loan will only be attached to the IP.
 
You would probably get your wife to get a LOC in her name only and to lend you the money with a writen commercial loan agreement so you can claim the interest.

If your wife cannot borrow because of serviceability then consider a joint loan.

Thanks for your input Terry, what is the benefit of doing this over my plan? My wife will be able to service the loan amount we require
 
Thanks for your input Terry, what is the benefit of doing this over my plan? My wife will be able to service the loan amount we require

Benefit of that plan is that the professionals who set it up get paid more :cool:

Corey is in Adelaide, you should have a chat to him about structuring your finances, as he will be able to work with both lenders and show you other options
 
The benefit would be:
1. asset protection
2. tax advantages
3. preserving your borrowing capacity.

It would cost no more to set up and Corey could structure this for you.
 
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