Banks do not like third party guarrantees for obvious reasons – they would have to evict and sell your mum up if you default.

I know of one lender that will do this, depending on LVRs etc. Both yourself and your mum with have to take separate legal adivce. Rates are around 8%.

However, a better option would be to do what Richard suggested. Take a 20% loan on your mum’s property, for the deposit.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

Commission is about 2% to 2.5% but you could vary this. eg set a price you want, and say you will only pay 1% for any sale below this, set a price a bit higher and offer more – an incentive for them to sell it at a higher price.

Also beware of signing on for 3 months. This is a long time, and some do not perform until the 2nd month when they think they may lose you. Try signing on for one month. If they can’t sell during this time, but are trying hard, then you could sign up for another.

Exclusive is probably better. Places with multiple signs on them appear to be desparate for a sale. But this tactic could work, by attracting more buyers.

Maybe you can add a clause saying they get nothing if you find your own buyer.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

Also check the size. Small units are hard to get finance for, and this can limit resale price.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

I have made a new thread at:
https://www.propertyinvesting.com/forum/topic/17263.html

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

I had better start a new topic for the cashbond ‘debate’

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

There are perfectly good reasons that someone might want to offer a rebate.

eg. repairs to be completed before settlement or $X comes off the price.

eg. must settle by XXX or $xx comes off the price.

etc

How can these be illegal?

Not informing the lender, MAY be a different matter.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

Sounds like you are asking for a rebate. As far as I know this is legal to do, though many solicitors do not like it.

You may be going into a grey area if you were to tell a lender you are paying a higher price for the property and then obtain finance on this higher price.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

Hi Guys

Rob, I can see your warming to the idea!

Derek, I beleive Steve Navra has a private ruling concerning his deductibility of interest for his cashbonds. Because the cashbonds return only about 4%, and it will cost you about 7% to borrow the money to buy them, there is a shortfall. The ruling is about the deductibility of this shortfall. The purpose of getting the bond is to increase serviceability, so deductibility is allowable.

But the neither cashbond or the ruling are not necessary for living off equity.

It has been about 4 years since I did the Navra course, so he may have modified his approach.

From memory, he says something like this:

Build up a large portfolio of good property while working. When you reach a certain level, you can ease off work, or stop completely. You can then draw down part of the growth of the portfolio afer it has occurred, taking now more than 80% of the growth.

eg. $2,000,000 worth of property. If the portfolio grew at 5%, that is $100,000 growth for the year. In this case, the investor could take a max of $80,000 out for use (lifestyle etc).

The next year, you portfolio does not grow at all. That means you cannot take out any extra funds. You may have to get a job! or you may have some money left over from the previous year.

Part of the money you take out would need to be used to pay for the additional interest incurred.

Steve Navra is a licenced Financial Planner, and he also runs cheap weekend courses a few times a year. He also incorporates shares into his program as well and suggests building up a good portfolio of shares which will add to your income.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

I don’t know. But it is treated similar to legal fees. They are purchase costs.

It would be good if I am wrong as it would be much better to claim them up front. I guess it could come down to the wording of the tax invoice>

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]