Hi everyone & thanks in advance for your help - I am a first time poster but have been keeping an eye on this forum for a while now and hopefully I can gain some advice!
I am looking at purchasing my first home, to rent out for a period of time and move into in a few years (am currently living at home still). My main problem is in finding a home loan. I am a casual worker (recently changed employers in a new industry) whilst in my final year of a masters degree - my current employer is related to my degree, however is different to previous employment and I currently earn $700 a week after tax and this is very likely to continue for at least 6months (until I graduate and can get a fulltime job I am qualified for!).
I am looking to purchase a property between $375-$390K and have a $25K deposit (not including FHOG) however I highly doubt a bank would lend me that amount of money. My parents are willing and happy to help out and a number of suggestions/theories have been made such as acting as security/servicing guarantors however with this size loan I am not convinced it is enough.
One other option would be if my parents and myself buy a percentage of the property each and once I am in a more bank friendly finance situation buying my parents share back from them (i.e. when I decide to move in so the property is no longer an IP but a PPOR). By my calculations and research I would be comfortable servicing a loan of $280,000 (70/30% split) between the interest rates of 6.5-9%.
Does anyone have any suggestions on other ways to go about this? I don’t want to rip my parents off and want to find a solution that minimizes risk as much as possible for both parties.
How do we go about splitting a loan?
When do we have to decide how the loan/finances will be split, at contract signing or settlement?
How would we then split the investment portions?
How easy is it to buy out the second percentage of the loan?
What impact does this have on capital gains tax and other taxes?
What exit strategies would be appropriate?
Any other questions that I have missed!
Sorry about the long-winded email – this is all starting to do my head in!
I am looking at purchasing my first home, to rent out for a period of time and move into in a few years (am currently living at home still). My main problem is in finding a home loan. I am a casual worker (recently changed employers in a new industry) whilst in my final year of a masters degree - my current employer is related to my degree, however is different to previous employment and I currently earn $700 a week after tax and this is very likely to continue for at least 6months (until I graduate and can get a fulltime job I am qualified for!).
I am looking to purchase a property between $375-$390K and have a $25K deposit (not including FHOG) however I highly doubt a bank would lend me that amount of money. My parents are willing and happy to help out and a number of suggestions/theories have been made such as acting as security/servicing guarantors however with this size loan I am not convinced it is enough.
One other option would be if my parents and myself buy a percentage of the property each and once I am in a more bank friendly finance situation buying my parents share back from them (i.e. when I decide to move in so the property is no longer an IP but a PPOR). By my calculations and research I would be comfortable servicing a loan of $280,000 (70/30% split) between the interest rates of 6.5-9%.
Does anyone have any suggestions on other ways to go about this? I don’t want to rip my parents off and want to find a solution that minimizes risk as much as possible for both parties.
How do we go about splitting a loan?
When do we have to decide how the loan/finances will be split, at contract signing or settlement?
How would we then split the investment portions?
How easy is it to buy out the second percentage of the loan?
What impact does this have on capital gains tax and other taxes?
What exit strategies would be appropriate?
Any other questions that I have missed!
Sorry about the long-winded email – this is all starting to do my head in!