ADVANTAGE OF A TRUST?
Purchasing a property under atrust can offer asset protection and tax advantage.
WHAT TYPE OF TRUST CAN BORROW MONEY?
- Property Investment
- Service
WHAT DO BANKS LOOK FOR?
- The type of trust
- The trust credit file
- The trust deed which confirms beneficiaries and the trustee
- The loan structure. To take advantage of negative gearing, the loan should be put under the trustee or director of the trustee company instead of the trust itself.
- The beneficiaries. Some lenders require all beneficiaries to act as guarantors which can make it more difficult to get a loan approved.
WHAT TYPES OF DOCUMENTS ARE NEEDED?
- A certified copy of stamped trust deed
- A certifies copy of company’s constitution
- Identification of all trustees, directors, and beneficiaries
IS IT POSSIBLE TO GET A LOAN AT CHEAPER RATE?
Yes, it is possible to get discounted loan by choosing the right lender. Also, make sure your lender processes your application as a residential property and not a commercial one as the fee will be lower. However, some lenders can not approve application for residential property.
WILL LENDERS CHARGE MORE FEES FOR TRUST LOANS?
Yes, lenders will charge additional fee because there is a lot more paperwork to deal with when applying for trust loan.
WHAT ARE THE BENEFITS OF BUYING PROPERTY IN TRUST NAME?
- Reduces tax payable by distributing income to others.
- Control and receive income without having your name on those assets.
- May allow passing assets to next generation without paying any fees.
DOES IT NEED A GUARANTOR?
Typically, the trust will be a borrower and the director of the trustee company will be the guarantor. However, some lenders may require all beneficiaries to be guarantors.