Terry is correct investors who used to live off equity are finding those days have gone as most lenedrs require some form of evidence if it is merely a stated income on the application.

With fewer lenders offering such products they can rate the risk accordingly and charge appropriately.

Nic

Nothing wrong with the Anz Breakfree package but the loan needs to be structured correctly.

I personally would not have the Chuware property on P & I even if was your old PPOR as interest only with offset is the way to go unless you have another PPOR loan.

Do not take out 110% of the new purchase price on the new property offering then security of Carlton.

You need to keep things separate and the Bank will have NO Idea how to structure it.

Personally I would use a mix of a Line of Credit and Interest only loans with an offset account and definately not unless you have no choice cross collateralise the securities. The Bank will encourage you to do this but it certainly isnt in your best interest.

Idea is not so far out at all but i think the number of Vendors willing to take such a deal will be limited.

Many of the Vendors will have a mortgage on their home and will be a matter of them having to take on 2 mortgages until you eventual settle.

Alternative would be to take an 80% LVR and 20% Vendor finance loan which maybe more attractive to them.

Anyway good luck and let us all know how you go.

Thats exactly right Jimmy and is why you would never terminate under the B & P clause unless the property had some shortcomings. 

Terminating under the finance clause is an acceptable way out as the finance needs to be on Terms acceptable to the purchaser.

Hi Jenny

1.As a guideline, how many basis points in interest rate above the banks' standard variable home loan rate should I offer to the seller?  Varies dependant on the Contract but most of the ones we have done have been set over the RBA Cash Rate rather than the Banks standard variable rate. 

2. Do I need a special property lawyer to draw up the vendor finance contract/agreeement and do the settlement or just a normal conveyancer will do?  Most lawyers would have no idea and is certainly a specialised area.

3. What would be the reasonable loan term to ask the vendor for?  I assume you are looking at 100% finance so 25 years is not out of the question. Of course the Vendor can only say NO.

4. Is there any traps that I (the purchaser) need to be aware of? How well do you know the Vendor ?

5. Can I ask the vendor to provide a periodic statement similar to the banks' statement? The Vendor must comply with the Terms of the UCCC so certainly will need to provide you with regular Statements. 

Denis

The other important factor with an interest only loan is the flexibility which is key.

You may decide to buy a house and live in there for ever and a day but alternatively you might just use the first house as a stepping stone to buying a bigger home in a few years.

Interest only gives you choice.

No i agree $1600 + GST / Sq M would be about right for Bris at the moment.

Thanks Andrew as always appreciate the wrap.

If you intend to submit numerous offers i would draw up a standard fax format asking the agent to prepare a formal purchase contract with a list of special conditions which are to be included.

The standard fax should include details on:

The purchaser (individually / Trust / Company structure) details.

1) Whether you wish to waive the Cooling off period (not recommended).

2) The number of days you require for finance and building inspection.

3) Settlement date.

4) Other Special Conditions.

5) Deposit amount offered.

Once you have received your Building Inspection back you can either terminate if the report is not acceptable or try and renegotiate the terms / price etc. Of course the Vendor does not have to accept this.

You can put in as many offers as you like.

Wow denny 6.21% is a shocking rate of interest even with the loan amount you currently have.