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Debbie M.
Debbie M.
Tamworth, NSW
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We want to buy an investment property in Port Macquarie, Price - $720,000. We own are own home and want advice if we can use the equity to buying the property and cover all the costs. Our home would be around $330,000. Can the property in Port just be in my husband’s name as he works full time - income $85,000, thank you?

4 years ago

Responses

have you done a budget to see what the cash shortfall would be: ie add up the rent and take off all the property expenses, then see how much you would need to contribute to make sure you dont end up living on cat food and wheet bix??

there is absolutely going to be someone out there who will happily lend you 3/4mil dollars. but you need to be comfortable with the cash side of it to ensure you can handle the cash shortfall, on $85k

the bank may wish to have both names on the mortgage, and often the property is purchased as joint tennants with the property allocated 99% to the high income earner and 1% to the lower income earner. this allows you to claim the loss where it generates the greatest tax benefit.

but remember, when you sell the investment property, 99% of the capital gain is allocated to that person too.....which means you dont get to smear the CGT across two tax returns......

good luck
bc

Comments

Hi Brendan, we are actually looking for a new accountant - does it matter that we live in Tamworth

Thanks
Debbie

Hi Debbie, I live in port macquarie and have most of my life, I’d be happy to drop over and see you

Comments

Hi Mark, we are buying in Port but will still be living in Tamworth

Regards
Debbie

Hi Debbie,
I have clients all over the country, including Tamworth:) I grew up between Tamworth and Armidale, so have plenty of ties to the area.
shoot us an email to: admin@bpcaccounting.com.au
regards
BC

Hi Debbie,
There are a few more variables such as age, living expenses, other debts, dependents and the rent you would receive.
Potentially you could borrow 20% plus costs against your Tamworth property ($180,000) in both names and then complete the purchase with an 80% loan ($576,000) in your husbands name.
I would suggest you sit with a broker AFTER you discuss your goals and needs with a financial planner to completely understand what you are going to do and why.
Best of luck with it all
Regards

Scott

Hi Debbie,
Can I ask a quick question?
Why is it to be just in your Husbands name?

On the off chance that there may be something on your credit rating, let me know (in private if you like) and I'll point you in the right direction :-)

If I'm off the ark, please ignore me. It's just that in the nine years I've been helping people clean their credit ratings so they qualify for their home loans, I've seen it many times that a couple struggle needlessly to buy in one name when it's often pretty easy to fix the other partner's credit rating so you can spread the load. :-)

Thanks Debbie

Graham

Comments

Hi Graham, our credit rating is fine but I will share your answer with a family member who I know has had a problem obtaining finance. Thank you

Thanks Debbie,
I'm glad to hear you guys are okay.
Happy to chat with your family member and let them know their real options.

Graham

Hi Debbie,

Provided there is no mortgage on your own home, yes in theory, you can borrow 20% deposit plus costs to fund the new purchase. You will also need to qualify for an investment loan for the remaining 80%.

In regards to how you structure the new purchase ie husbands name only or both names, this will not change your borrowing capacity. If you are looking at doing this for tax reasons, he can have the new loan in his name only or you can even have a 99%/1% ownership. Best to discuss the tax implications with an accountant first.

Happy to have a free no obligation chat to work out borrowing capacity for you.

Good luck,

Umit Talarico
Premier Lending
0425 354 821
umit@premierlending.com.au

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