Helping out sister with servicing a new loan

My sister/family is considering buying an inner-city Sydney apartment, this would be her first home.

Her income is relatively low and on servicability alone would cover only around half the value of the apartment. She has over 5% of genuine savings already.

Me and my parents have around 60% of the value of the property in spare cash that we are planning to tip-in.

My preferred plan is to take out an 80% LVR loan (20% up front, no LMI) and tip in another 40% or so into an offset account attached to the loan. The main idea is to lower non-tax deductible interest to as low as possible and also retain flexibility in the future with an offset.

I'm prepared to add my own high income to the loan as a guarantor if necessary.

The trick is that I'd prefer that the title of the property stays completely in my sisters name. So it doesn't affect FHOG and simplifies things in the future.

Does this sound feasible at all ?

On another note, is the Westpac 85% no LMI deal still available ?


Thanks,
Thrawn
 
Hiya Thrawn

maxlend 80 % with someone like CBA

Security can be in her name, guarantee provided by you, your spare cash can go into an offset etc

All sounds feasible

ta
rolf
 
I know she's your sister and all but this really sounds like a bad idea. If shes on a low income she should be buying something she can afford, it could all end up very messy.
 
I know she's your sister and all but this really sounds like a bad idea. If shes on a low income she should be buying something she can afford, it could all end up very messy.

Its mainly my parents thats driving this.. they're not happy with my sister's current supposedly 'substandard' living arrangements (she's renting a room in Redfern) and in our culture we don't like having landlords...

Its not a big deal, she's a pretty thrifty person (more than me).. she's just out of Uni and she's already had decent amount of cash saved up by herself since high school.

And in the end, the money in the offset account represent a very small fraction of the family's total equity. She'd be a black sheep if she wastes the money away.. but won't cause the family financial strife.
 
maxlend 80 % with someone like CBA

Hopefully the same across pretty much any bank ? I'd prefer not to go with CBA as their offset account is a bit funny from my recollection

Security can be in her name, guarantee provided by you, your spare cash can go into an offset etc

Presumably the bank wouldn't know/care about the existence of the 'spare cash'.. as the bank can't count money in offset as part of LVR.

I rang OSR NSW the other day and they said that this type arrangement wouldn't disqualify FHOG.. it is a bit of a gray area though, does anyone think this is a problem ?
 
Speak with a good broker, but my understanding as a mediocre broker is CBA is the only lender who make income or servicing guarantor available to any person, rather than just spouses.
Thier Offset is crap, in that it isnt transactional, but you could set up a small LOC that is transactional, or just make do with the Offset they have.
 
My sister/family is considering buying an inner-city Sydney apartment, this would be her first home.

Her income is relatively low and on servicability alone would cover only around half the value of the apartment. She has over 5% of genuine savings already.

Me and my parents have around 60% of the value of the property in spare cash that we are planning to tip-in.

My preferred plan is to take out an 80% LVR loan (20% up front, no LMI) and tip in another 40% or so into an offset account attached to the loan. The main idea is to lower non-tax deductible interest to as low as possible and also retain flexibility in the future with an offset.

I'm prepared to add my own high income to the loan as a guarantor if necessary.

The trick is that I'd prefer that the title of the property stays completely in my sisters name. So it doesn't affect FHOG and simplifies things in the future.

Does this sound feasible at all ?

On another note, is the Westpac 85% no LMI deal still available?


Thanks,
Thrawn

hi there Thrawn,

The lending requirements for Guarantors can differ between banks.

It sounds as if you may have to use your income for serviceability.

As you have mentioned Westpac, their policy in regards to a Spousal Guarantee is different to that of a Parental Guarantee and can be restricting.

Your scenario is complicated and you would do better if you sought advice from a broker or the bank.

The 85% no LMI came and went.:eek:

Regards JO
 
CBA's the only mainstream lender that will allow a servicing guarantee.

If the required LVR is 60% or lower, there may be other options available.

The Westpac 85% no LMI ended a long time agao.
 
its great to have familly to help, as i did not, but does she understand, the big picture,

sounds like it would be cheaper to buy her a husband:D

and there was no sexual predujece in the statment,either before folks reply in anger, ?
 
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