Hi,
This is from http://www.propertyinsider.com.au
Wizard plans to set up “equity sharing” loan
The Government recently set up a Home Ownership Task Force to discuss ways to make home ownership more affordable to a greater number of Australians. One of the suggestions put forward by the task force was an equity sharing loan arrangement. Australia’s largest non-bank lender, Wizard Home Loans, has suggested this week that it will release an “equity sharing” loan to the market within the next twelve months.
In an equity sharing arrangement, the ownership of a property is split between an “owner” and a silent partner such as a bank or fund manager.
The owner has effective use of the property and can make decisions to alter or sell the property without reference to the partner. If and when the property is sold, a percentage of the capital gain is returned to the silent partner.
In the case of Wizard Home Loans, property equity would be split between the owner and the investment bank Turnbull & Partners, which is headed by Liberal Treasurer Mr Malcolm Turnbull, one of the key members of the Home Ownership Task Force.
Home buyers would need to pay around 70% of the deposit and loan repayment, with Turnbull & Partners making up the difference. If and when the property is sold, 60% of the capital gain (ie: the amount the property is sold for less outstanding loans and costs) will be returned to Turnbull & Partners.
Other banks and financial institutions are also reportedly looking at the establishment of equity sharing loans.
Regards
Michael Gruber
This is from http://www.propertyinsider.com.au
Wizard plans to set up “equity sharing” loan
The Government recently set up a Home Ownership Task Force to discuss ways to make home ownership more affordable to a greater number of Australians. One of the suggestions put forward by the task force was an equity sharing loan arrangement. Australia’s largest non-bank lender, Wizard Home Loans, has suggested this week that it will release an “equity sharing” loan to the market within the next twelve months.
In an equity sharing arrangement, the ownership of a property is split between an “owner” and a silent partner such as a bank or fund manager.
The owner has effective use of the property and can make decisions to alter or sell the property without reference to the partner. If and when the property is sold, a percentage of the capital gain is returned to the silent partner.
In the case of Wizard Home Loans, property equity would be split between the owner and the investment bank Turnbull & Partners, which is headed by Liberal Treasurer Mr Malcolm Turnbull, one of the key members of the Home Ownership Task Force.
Home buyers would need to pay around 70% of the deposit and loan repayment, with Turnbull & Partners making up the difference. If and when the property is sold, 60% of the capital gain (ie: the amount the property is sold for less outstanding loans and costs) will be returned to Turnbull & Partners.
Other banks and financial institutions are also reportedly looking at the establishment of equity sharing loans.
Regards
Michael Gruber
