Selling property that was used for equity

Discussion in 'Loans & Mortgage Brokers' started by Think and Tinker, 10th Apr, 2021.

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  1. Think and Tinker

    Think and Tinker Member

    Joined:
    7th Oct, 2020
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    Location:
    Melbourne
    Hi all,

    Just a question relating to loan structuring. I'm looking to buy a property under a trust using equity from an existing property I own under my personal name. If down the track I want to sell the property under my name how does the lender view this? i.e. disposing the property that is being used for security? Will they call the loan making me use the proceeds to pay off the debt or is it possible to shift the security to the property held within the trust?
    Thanks
     
  2. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    41,667
    Location:
    Australia wide
    That is a bit vague. What do you mean by 'using equity'? You can't use equity, but you can borrow against property or use property as security.
    If the security for a loan is sold that loan will either
    a) need to be paid out or
    b) need new security

    You would either need to lend the trustee the deposit and use your property as security or Allow the trustee to use your property as security for the trust loan.

    If the trust property increases in value enough the trustee could borrow more money to pay you back or move the security from your property to its property.


    See this one
    Tax Tip 74: Selling a property that secures other loans Tax Tip 74: Selling a property that secures other loans