PAYG + Beneficiary (income from discretionary trust) for serviceability

[iPeon]

Hi,
I currently have a salary job and I want to purchase my 2nd investment property in few a months.

I've got family who are about to start up a small business doing tradesman type work, under a discretionary trust structure. The business will earn a real income and i will be one of the beneficiaries.

I'm wondering.. can the banks add both the income from my job (PAYG) plus the income distribution i receive from the trust in determining maximum serviceability?

Given the trust is not setup yet, i might be able to influence how it is setup if there are any special requirements (eg. type of trust, i have to be trustee etc)

Any advice would be appreciated

First time post btw

 

[Rolf Latham]

Hiya

Couple of things there

1. The business would need to be established for 2 plus years with financials.

2. As a bene only of a DT, your income would be at the discretion of the trustee. Not many banks that I know will generally allow that income for servicing. if you are the trustee, then this is different.

ta
rolf

 

[iPeon]

2 years, ouch... the sooner the better then.

We are going with a corporate trustee setup for asset protection, but when you refer to me being the trustee, will i qualify if i am one of the directors of the trust?

I'm curious how the loan would be structured in that instance so that the income distribution is accepted.

Would it look something like this:
Mortgagor: iPeon
1st income - PAYG
2nd income - trust distribution

or

Mortgagor: iPeon
1st income - PAYG
Guarantor: Business name of the trust (then they would look at the business financials)?

 

[Rolf Latham]

2 years, ouch... the sooner the better then.

We are going with a corporate trustee setup for asset protection, but when you refer to me being the trustee, will i qualify if i am one of the directors of the trust?

I'm curious how the loan would be structured in that instance so that the income distribution is accepted.

Would it look something like this:
Mortgagor: iPeon
1st income - PAYG
2nd income - trust distribution

or

Mortgagor: iPeon
1st income - PAYG
Guarantor: Business name of the trust (then they would look at the business financials)?

Depends if you also have a shareholding , and diff lenders will look at it in diff ways.

If you have consistency of distrib from the business they will want a guarantee from the business, and possibly a directors guarantee. Problem with that is that the other directors get roped in too.

ta
rolf