Hi All,
I have a few issues that have arisen in my investigations that not many people seem to know the answer/solution to in regards to lease options.
In the case of a back to back lease option, what is to stop the seller from going to get a second mortgage or caveat loan for the balance of what the first mortagee has not gotten security over?
Can you stop someone from getting and using a line of credit against the property once you have a lease option in place? This would probably only be of concern in a rising market. If someone was to use a LOC it would obviously increase the risk of the seller defaulting and the buyer being removed from the property.
Can you prevent a seller from refinancing a property once a lease option is entered into.
Any opinions of people who have encountered these issues would be great.
Cheers
Dave Ward | Geronimo Finance
http://www.geronimofinance.com.au
Email Me | Phone MeProperty Investor, Property Investment Expert & Advisor, Finance Expert & Strategist
Interesting question I have been trying to find out the same thing.
Also i was wondering what prevents the seller from changing the type of loan from a non-redraw loan to a redraw loan.
A caveat would prevent them increasing the loan or changing the loan type. Lenders will do a title search and find the caveat and will not, and cannot, settle while the caveat is still there.
Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe†in subject line.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You must be logged in to reply to this topic. If you don't have an account, you can register here.
