Equity for family purchase?

Question from Gerrit updated on 4th December 2019:

We own a home in Cambridge. Its value on Homes.com is $845,000 to $920,000. The outstanding amount on the mortgage is $460,000. Both my wife and I are self-employed and we have three kids.

As we are self-employed, our accountant does a good job showing as little as possible income. Our total income is $170,000 but our net profit is only $80,000. Our cars are in cash. We have credit card debt of about $20,000.

Our parents are South African and we would like to buy a property with them in New Zealand using the equity in our house. What do they need to bring to the table so we can use our equity? How can we set this up so we can do something like this together?




Our expert Kris Pedersen responded:

Based on the information you’ve provided it is unlikely you will meet bank affordability requirements for further funding at this stage. In regard to your parents: I presume they are living in South Africa and, because of the non-resident rule change, they wouldn't be able to buy with you unless they can give you cash to assist a purchase. If this is the case, check with a solicitor to make sure everything is fine.



Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.krispedersen.co.nz

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