Buying property Together

Where a single asset or property is owned by more than one person (or company) it will be owned by them either as joint tenants or as tenants in common.

Joint tenants
Under a joint tenancy, each owner effectively owns the whole asset. In other words, each owner shares ownership equally. If one owner dies, the other owner acquires the deceased owner’s interest automatically.

Tenants in common
Where two or more people own an asset as tenants in common each owner holds their share of the asset outright. Under this ownership structure, there is no need for there to be ‘equality’, for example, A might own 60%; B would then own 40%. If a tenant in common dies, their interest in the property may be distributed in accordance with the directions in their will; that is, it does not pass automatically to the remaining tenant in common.

Consequences of joint tenancy and tenancy in common arrangements
On the death of one joint tenant, the asset automatically passes to the other or others, regardless of the terms of the will of the joint tenant who died. If a joint tenancy is severed (that is, converted to a tenancy in common) each owner can then direct how their share in the property is passed following their death by making provision in their will.

In terms of the liability for a mortgage and its repayments, it usually does not matter what tenancy (joint or in common) is in place, all owners are equally and fully liable for the whole amount.  Consequently, when one of the owners wants to buy another property by herself, banks usually assesses her borrowing capacity on the basis of the whole existing debt,  as she is liable for the full amount i.e. her borrowing capacity can be significantly less than it would be considering her actual repayments.

Some Banks, however, have recently launched new “Property Share” policies allowing people buying a property together to keep their loans entirely separate.  Both parties act as cross guarantor for each other, but such a loan structure allows for each party to pay back their loan at their own pace and to take out different sized mortgages. The applicants must be able to afford their own loan portion and it is mandatory that they seek legal advice before entering any such arrangements.

EXAMPLE:  One set of borrowers were buying for investment and their friends were first home buyers (without any grant or duty reduction). Each was only liable for their share of the debt which left both parties able to continue to borrow for future properties.

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A Vision for Avondale Heights

Let us not miss this historical opportunity to build a heart for our community, it’s now or never!

Firstly, thank you for taking the time to read this letter; may be it is an important step helping to change our community for the better. In the past, Avondale Heights Action Group has managed to accomplish a lot; everyone’s efforts have prevented our TAFE site turning into another suburban ghetto. Avondale Heights Action Group has also managed to bring our residents together for a sole common purpose, to make our community a better place. All residents should be grateful for and proud of the tireless efforts of the volunteers who have put time, effort and money into the campaigns.

AvondaleMasterplan2-960x540 (1)

As a result of these efforts, PLACES VICTORIA and AUSTRALAND have now come back to our community with another idea, namely to develop 135 two-story housing blocks on the TAFE site; the problem with this idea is not only that it won’t have any positive impact, but also that it actually robs our suburb and all of its residents of a great opportunity. Given that the TAFE site is actually at the heart and centre of our suburb and that it houses the local library, kindergarten and sports centre, as well as the local primary school across the road – we actually now have the unique chance to transform this central site into a living centre, into something much better – a true heart for our community.

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Sydney: Is Your House Earning More Than You?

News Corp, 4/8/2014 by Kirsten Craze

Property prices in some Sydney suburbs have skyrocketed by more than five times the annual household income in a year, making thousands of homes much higher earners than their residents.
While the greater Sydney house price median increased by $71,000 in a year, according to RP Data figures, the Australian Bureau of Statistics’ average full-time adult earnings report puts the Sydney’s household income at $77,923. But some specific pockets of the harbour city have had house price medians leap by as much as $600,000.

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Extending Tram Route 57

Numerous proposals have been made for improvements to the Melbourne tram network, the largest such network in the world. Nearly all of these have been for track extensions of existing lines to service new areas and suburbs.

Now the Victorian Greens again propose these extensions in their Tram Connections Backgrounder.

As part of these plans, Route 57 would be extended 5.5km from its current terminus in Maribyrnong along Canning Street and Milleara Road before reaching a new terminus at the Keilor East shopping precinct.

Unfortunately they currently are in no position to deliver…

 

The New Footscray

SMH, 13/8/2013 by Simon Johanson

A pocket of Footscray will become a satellite city of 5000 people living in more than a dozen high-rise towers after recent amendments to Melbourne’s planning scheme.

But the new scheme may allow towers up to 25 storeys high on the banks of the Maribyrnong River, prompting anger from nearby residents.

Planning Minister Matthew Guy has cemented controls for a small sandwich of land between the Maribyrnong River, Hopkins Street and Williamstown railway line that is set to become a forest of 18 tall buildings near Footscray’s town centre.

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Do’s and Dont’s to Get a Good Credit Record

12 March 2014 hardly sounds like a key date in history.  But, for those looking to buy property, it could have been a key date determining whether or not they get a loan.

Whenever someone applies for a mortgage, one of the first things a bank does is run a credit check on them.  As of 12 March, these credit checks & credit reporting have changed – and it could have a huge impact on whether or not a loan application is approved. Under the new regime, every time someone misses their payment by more than five days, their credit file is given a black mark and their credit rating gets worse.

The old system was less comprehensive; simply registering things like the number of credit inquiries someone has made and whether or not they have any defaults. But, in addition to these, under the new system individuals now have an incentive to manage their reputation – loan applicants get green lights for positive factors such as how often they have made repayments on time.

Here are some of the things that banks will know from the new credit checks.

Whether repayments have been made on time over a two-year period

  • If a repayment of over $150 is more than 60 days late, it will be listed as a default
  • The limit on the credit cards for which you have applied
  • The type of card for which you have applied
  • The date you opened a credit account, the type of account, and when it was closed
  • If, because of a default, someone has entered into a new varied arrangement for repayments

 

Dos and Don’t’s to Get a Good Credit Rating Under the New System

Do

  • Set up automatic debits to pay your credit card and loans on time
  • Close any credit facilities you don’t need
  • Check your credit file http://www.mycreditfile.com.au/

Don’t

  • Pay a debt more than five days later
  • Shop around for credit cards and store leases when you don’t need them
  • Fail to contact the lender to renegotiate your repayment terms

Macquarie Private Wealth

SMH, Business, August 2, 2014

Adele Ferguson and Ben Butler

Glancing up at the sparkling silver doughnut logo as he walked into the millionaires’ factory for a meeting with his Macquarie Private Wealth adviser in July 2009, Don Waller was hopeful that this meeting would be kinder than the last.

After more than half his life savings had been torched by the global financial crisis in the previous year, he expected the recent 40 per cent rebound in the equity markets to pep up his finances.

It was not to be. Waller’s adviser, who still works at the bank, told him his already devastated financial portfolio had gone up just 4 per cent and he had not been able to take advantage of the $96 billion equity issues corporate Australia was raising at rock-bottom prices.

‘It was gut-wrenching,’ Waller says. ‘It wasn’t until I got home and read the annual review document that I realised the managed funds I had been put into had a heavy exposure to foreign currency movements.’

As he flicked the pages, he was horrified to discover that his family trust had a 76 per cent exposure to foreign currency and his superannuation fund had a 48 per cent exposure, despite explicit instructions that he did not want currency exposure.

Waller and his partner signed up with Macquarie in 2005 after receiving a substantial financial windfall from the sale of a company he had worked at for a number of years. The couple turned to Macquarie because they believed their money would be safe – and do well.

Assessed as balanced/growth investors – not high-growth or speculative – they were advised to pour their $3.2 million into an investment portfolio and gear up with another $2.5 million, which was placed in Macquarie’s costly Geared Equities Investment product.

The net effect of the high-fee MPW investment recommendations was to reduce their nest egg from $3.2 million to an estimated $1.4 million when they finally pulled up stumps and walked away.

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Why Use A Broker?

The key reasons why you should use a Mortgage and Finance broker:

 

Brokers can give you choice

Good brokers are not tied to any particular lender. They are accredited with a large panel of banks, building societies, mortgage managers and other lenders. They have no interest in recommending one product or one lender over another.

Whatever your circumstances, a good broker will find the deal that’s right for you, not the lender. 

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