Please help .....

Yes I will
thank you so much ST. I don't think this is a BoQ issue. It's more of the individual's selfish and careless act towards another person just for their own personal gains.

 

You can't be director of the trust, but are director of the company which acts as trustee.
You need to read the trust deed and see if there are any restrictions or the trustee borrowing and then seek legal advice and tax advice on the terms of your proposed loan.

 

Is it possible at all for another bank to settle in two weeks time ? He says his broker mate can get Wespac to settle my loan on time if I go with them but I just cannot trust anything he says anymore.

 

Correct I am director of the company. That trust has been set up with an ABN. Yes that's what I meant.

 

Terry, so in this case I can lend the cash to the trustee in the trust in order to settle. Then the trustee can borrow from the bank and return me the money later ?

But if the name of the loan is in my name, I,e I am also the trustee then will this still be ok ?
Will the interest incurred from the loan that draws down post settlement still be tax deductable ?

The trust has been set up as discretionary trust with a company structure and I am the director of the company. This was done to save on land tax.

 

You need specific legal advice as does the trustee.

It is possible for you to lend the trust the money and then the trust to borrow to refinance this loan later.

Which loan is your name on? If the trustee is the owner then it would be the trustee that should be borrowing..

you need advice on the terms of the trust - from a lawyer.

 

You've mentioned a few times whether or not a new application can be submitted and approved in 2 weeks. Seeing as this guy seems to have taken you for a ride i wouldn't be trusting that 'his friend' from Westpac can do anything.
Maybe a broker here has advise whether or not you can get approval in the 2 weeks you have. You are definately more likely to get a less biased opinion here. I dare say that if you want to try another broker you have to start now.
Any brokers here know whether 2 weeks is doable?

 

Yes it is possible to settle in time.. But Westpac are pretty slow. I would not use him, but find your own broker.

 

It is possible to settle in a week, or even a few days.

 

An idea just popped up. if I settle cash. I've got some equity currently sitting in there (in a separate account linked to its own empty offset account) so will be using these to settle in order to maximise tax deduction. This will cover about half the loan. My existing investment loans also have redraw facility. So if I pour cash into these loans then pull them out to settle. Will this make the interest charged tax deductable ?

Once I get a new job and new loan for this IP can I use the cash back funds from the loan to pay down these redrawn amount ? Will this make interest on the new loan tax deductable ?
The new loan will be fixed interest and at a much lower rate than my existing loans.

Terry or any other tax experts on the forum please please let me know...

Thank you so much.

 

Would you have any broker recommendation Terry ?
I find it hard to imagine that any banks out there would be able to settle in such a short time as I know NAB definitely would not and all my loans are with them now.

 

multiple issues!

You cannot have 'equity' sitting in an offset. If you mean borrowed money then you have made an error of judgement. If you have mixed these borrowed funds with cash then the interest will not be deductible. If you then borrow more and park it in the offset you will be further mixing and destroying deductibility of interest.

It may be possible for you to use redraw to borrow to lend to the trustee, but great care is needed.

 

Hi Terry,
No they are not mixed. I separate them very carefully. Equity isn't sitting in offset either, I've corrected the above, just a separate loan account with an empty offset account set up just in case they may be needed in the future. I do follow your tax tips!!!

My offset accounts just contain pure cash from salary pay and any cash left over from rent minus outgoings. I never mix personal cash with borrowed funds. I hope this set up is ok.

 

correct, my thoughts exactly York. I am unsure any lender would be able to do this and am hoping any experts on the forum would be able to let me know so I can prepare for the worse case scenario which is settling via cash Please please help and let me know if you are a broker ..Is 2 weeks a realistic and doable time frame ?

This is so heart breaking as this money has been very painfully saved up over the years for my future home which will now disappear

 

I don't think the timeframe is as much of an issue as the employment situation. If you don't have new work coming up, you'll run into the exact same issue with every bank there is. No-one is going to lend to you if they think you'll be unemployed very shortly.

 

Yes this is true and I just wish the bank manager could just be a bit more diligent with this and advised me of their requirements beforehand. I don't think he even bothered looking at the document until much later when it got a bit late as my file was quite large or so he said.

The whole time he had been advising everything will be fine and there shouldn't be any issues. Gosh this is nightmare.

Getting another job won't be an issue but it does take time for the process and to get the contract in place will take a few weeks unless I 'd just take anything and settle for a pay cut etc .. and even this won't take a few days to happen

 

@Honeydew ring a broker from the forum (not just any broker, most won't have a clue) or a tax agent and let them have a look at your cash/equity situation. We can't advise on the best course of action via a forum like this.

You might need to pay them for their time as there won't be a loan involved at this stage, but at least they'll be able to give some specific advice about the best place to take the funds from.

 

Thank you Jess. So you reckon it is unlikely any lender will give me the loan given my employment situation ?

I just spoke to his broker mate and he said there may be a good chance CBA will accept if we just use my payslip as it has PAYG on it and we'll just not disclose the employment contract as I did early on with BoQ . This sounds a bit dishonest to me and if the bank does pick up the fact that I'm a daily rate contractor then as Jess mentioned we'll be back in square one. He did say that 2 weeks is not a realistic for a trust structure. Personal name maybe doable...hrmmm...

I called the BoQ bank manager and asked if having cash as security helps as Terry suggested and he said no as the employment contract is required to show I can service the loan. Gosh if that was the case why didn't he disclose this much earlier instead of feeding me crap.

So I have offered to pay interest in advance for a whole year and can provide employment details in the past 10years as it has been consistent with no gaps in between. He said he will try this next week and see how it goes. Would this help ?

Has anyone had this issue before and was there any work-round solutions used to get over this difficult situation ?

Please could you share them ?

 

Yes, completely unlikely unless you lie. That said, the interest in advance is interesting and not something I've ever had to try so I'm not sure how they'd look at that....but I still doubt it. No job is no job, and if anything went bad it would come back to the fact that they've given someone with no job a loan.

 

Low Doc may be an option.