Equity split when selling.

Discussion in 'Loans & Mortgage Brokers' started by Spad, 5th Nov, 2019.

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  1. Spad

    Spad Well-Known Member

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    Hello, If you sell your ppor with an equity split do you have pay the split off or just the main loan. The split was used for an investment property.
     
    Spad, 5th Nov, 2019
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  2. thatbum

    thatbum Well-Known Member

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    ...what would the split loan be secured against after you sell the ppor?
     
    thatbum, 5th Nov, 2019
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  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    To sell a property you would need to discharge the mortgage. If the mortgage secures loans then these loans need to either
    a) be paid out, or
    b) be secured by a new security such as a mortgage over some other property.

    There are important tax issues to consider. See some here:
    Tax Tip 74: Selling a property that secures other loans Tax Tip 74: Selling a property that secures other loans
     
    Terry_w, 5th Nov, 2019
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  4. Spad

    Spad Well-Known Member

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    So we could secure the split against a new ppor?
     
    Spad, 5th Nov, 2019
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  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Potentially. Will you own it before or at the discharge of the mortgage? Will it have enough equity?
     
    Terry_w, 5th Nov, 2019
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  6. Spad

    Spad Well-Known Member

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    No. Will have to sell first. Then find/buy new ppor. Yes will have enough equity.
     
    Spad, 5th Nov, 2019
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  7. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    That means discharging the mortgage will be needed. See my tip
     
    Terry_w, 5th Nov, 2019
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  8. Travelbug

    Travelbug Well-Known Member

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    Is the IP with the same bank? If it has increased in value, you may be able to transfer it to the IP?
     
    Travelbug, 5th Nov, 2019
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  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Good point but it can even be done with a different bank too
     
    Terry_w, 5th Nov, 2019
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  10. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    before sale refi to lender x that offers decent portability, security sub.

    Sell PPOR, port the equity loans to new security

    We do this regularly.

    ta
    rolf
     
    Rolf Latham, 7th Nov, 2019
    #10