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Sibling co-financing on the rise- but at what cost?

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Australian Broker | 30 Jan 2013, 06:05 AM Agree 0
Statistics show the percentage of sibling groups opting to co-finance mortgages is on the rise. Real estate agents are thrilled...brokers, not so much
  • Derek Miles | 30 Jan 2013, 10:24 AM Agree 0
    This is where the broker has a responsible role. The broker should spend time having the conversation with the siblings about their futures, and the advantages and pitfalls of joint ownership. The practice shouldn't be discounted out of hand because the arrangement can work for some families. It is a matter of being informed about the possible costs and disadvantages if any.
  • Broker | 30 Jan 2013, 10:42 AM Agree 0
    I tend to find that any enquiries re this type of structure come well equipped knowledge wise, their parents aren’t stupid and they already know the potential pitfalls.

    As a Broker I am not a Mother or a Nanny , but yes I will briefly explain the basics in the interest of business professionalism, basic decency and common sense , NCCP has not changed my view on this one iota

  • Fraught with danger | 30 Jan 2013, 12:04 PM Agree 0
    Sibling purchases, parents buying for children, when younger, etc, etc.
    Short term, great solution. Long term, fraught with danger. Capital gains implications, Stamp duty transfers. Elderly parents now the owner of an additional property that can impact on pensions, & healthcare entitlements.
    Strongly advise & recommend, proceed with EXTREME CAUTION. As the broker with the new Credit act. Who is to say this will not come back & bite you, if you have not discussed, all potential issues, or recommended they have addtional Financial Advice, to nullify your position. Would need to clearly show notes & have a letter confirming ALL potential "current" & "known" future issues discussed. Think I am kidding. Wait until it happens, when someone decides to sue.
    Good Luck.
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