Unlock the Power of Electronic Signature Licitness for Mortgage in Australia

How to eSign a document: electronic signature licitness for Mortgage in Australia

hey guys really simple setup here this setup probably suited to someone who just owns their own own occupied property so for example what commonly happens is someone's own their property over a period of years maybe 5 years property's gone up a lot in value so this example here we have someone's property it's now $800,000 the cute little house that's the house I live in own occupier some people call it PP same thing for your reference the home loan is $400,000 how do we get the equity out of this house to buy an investment property so first of all the equity basically is a difference between what it's worth and what you owe on it so the net value of it is 400,000 the bank they just want to lend you as much as possible obviously they got to lend your money within within the regulations but from the bank's point of view you haven't actually got that much lending compared to the value of the property so Standard Bank rules uh they will go to 80% of the value of the property so 80% of that is uh 640,000 so your 640,000 is what they will end up to the current loan is 400,000 so the difference between that and that is $240,000 so that's how much Equity you can tap out so you can go to the bank and you can say hey give us some extra money we want to buy an investment property generally in this situation I've done some numbers on the clients in come and figured out kind of a ballpark kind of range of what they can do in terms of investment property so let's just say for example they want to get $100,000 out just to make number simple what we would then do is create a separate split you wouldn't add on to the 400,000 you already have I'm going to explain why you wouldn't do that a lot of lenders these days will say well now you got to have two separate loans anyway so let's just thrw that out here 100K so your 100K is your deposit money for the purchase of the investment property so let's just summarize that really simply we've got the house you live in you've got your existing hom loand against it you pull out some more money for the deposit for the investment property purchase so let's go over here and go [Music] investment so let's say I've done the numbers now and I've said look you can purchase for 450,000 as a Max uh for your investment property firstly a lot of you guys in mg Sydney might be going 450 that's not very much but actually quite a lot of properties are bought um at around this Mark around the nation 450 bank's going to say maximum you can go to this is 80% now a little side note here you can go higher um it does involve things like lender's mortgage insurance for this example all I'm doing is making it a bit simple so 450 80% that is going to be 360 Grand and you're going to have to come up with the with the 20% so that's 90k need 90k um where do you get that from you've got your 100K here um so you notice it's a little bit higher that will cover whatever costs there are so stamp Duty so in other states that actually might need to be a bit higher for example in Victoria your your cost are going to be around 20,000 so you would need 110 ,000 so you make this whatever the costs are to be able to pull off this purchase at 80% otherwise you're going to pay mortgage insurance which may or may not be uh part of your strategy that's probably something you want to chat with definitely a mortgage broker but whoever else you're seeking Financial advice from that's your basic setups I get a lot of questions on well why do you have these three accounts why can't I just have one account well the reason we'll go back to the reason you have two here is because these are two different purposes so this loan is not tax deductible the interest on the loan sorry is not tax deductible the interest and all the cost of this loan is tax deductible so at tax time all you need to do is give your accountants the statements for this and it's easy for them to prove especially if you get audited later on to prove what the interest was because it's in the bank statement the reason why you keep these two separate these two loans are secured against your home this loan is secured against your investment property so the bank's not holding all of these properties against all of the loans so putting it simply you have more control than the bank in this situation and that's actually the preferred way of doing things the only other thing I'll add there in terms of having a statement um that you can give your accountant what I would do is generally when you set this up I would create a second everyday bank account generally what happens is with this setup you might have another bank account or an offset account against this property which you're using as your everyday account where your wages get paid I would keep that as it is but for this investment have another bank account um and the rent goes in um and the bills go out again the reason why you want to put every everything in the investment any cost or income with the investment through this bank account is so you can just give it to your account at the end of the tax year makes things super simple and super easy I would say for most people this is a structure that's used most of the time