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  • Profile photo of MatthewSMatthewS
    Member
    @matthews
    Join Date: 2010
    Post Count: 2
    January 5, 2010 - 4:24 am

    Hi all….

    I'm new to this so please bear with me. I am looking to purchase  my first investment property in Victoria. I currently own a house valued at $480,000 and owe $280000 on it. I have been pre approved for a $300000 loan. I only have minimal savings.

    I would like to know how I get the 10 % deposit as my money is equity? The NAB said something about being a deposit guarantee. Is this a normal occurance?

    Thanks

    Matt

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    January 5, 2010 - 5:13 am

    Hi Matt

    Not quiet sure what you are referring to.

    If you mean the Vendor is happy to accept a Deposit Bond Guarantee then this would be arranged through an Insurance Company and something your mortgage broker can do for you.

    I am hoping you are not cross collateralising the loans with the NAB but it does sound like your are Grrrrrrr.
    Otherwise you could just pay the 10% deposit from your investment line of credit secured against the PPOR.

    Would need to work interest cost V Deposit Bond Premium to see which worked better from now until settlement.

    Richard Taylor | Australia's leading private lender

    Profile photo of MatthewSMatthewS
    Member
    @matthews
    Join Date: 2010
    Post Count: 2
    January 5, 2010 - 5:26 am

    Thanks for your reply Richard.

    It looks as though I am cross cocollateralising the loans. How would you suggest I go about changing this?

    The property we are looking at requires a deposit of $26000. I don't have those sort of funds available to me. The NAB told me that they will give me a deposit guarantee for the $26000, which will cost me $300. I just had been looking through post and could not find anything about these deposit guarantees. How do you put a deposit on a property without cash and just equity?

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    January 5, 2010 - 5:32 am

    Hi Matthew

    Hate to say it wont be in the NAB's interest not to cross collateralise the securities for you and they certainly wont want to tell you how to do it.

    If you have a mortgage broker on board he can show ways around it as the NAB line of credit or similar is not attractively priced.

    A Deposit Bond is normally provided by an Insurance Company and is basically treated like a new loan application.
    They will want to see a formal approval from the lender before they release it but this is normal.

    The NAB may have just offered you a secured od facility or similar unsure without all the details.

    Either way i would be avoiding the X collateralising like the plague especially with the equity you have.

    Richard Taylor | Australia's leading private lender

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