Be careful if you decide to go for a "cheaper" loan. The smaller companies often have c$#$#p service and if you have a 30 day settlement you end up into forced delays due to the incompetence of the bank (this has happened to me in the past). In some ways you are better off getting a loan through the big banks because they generally get the job done quickly.
Another thread had the story of how imcompetent RAMS is so I would never go near them. Do a search on here hopefully there's lots of stories good and bad to help you decide the banks that provide reliable reasonably quick settlement.
At the end of the day saving .2% may not be worth it if the bank screws you around and delays settlement.
Unfortunately you have made one of the stupidist mistakes when buying a house. Next time you sign a contract you may want to be a bit more careful. Would you care to provide a reason why you did NOT put a finance clause in the contract?
You can delay settlement by a few weeks, maybe a month. In that time you have to raise the missing $20,000 plus the vendor can charge penalty interest (normally around 12%pa).
The vendor will eventually get sick of your delays and excuses. They are entitled to put the property up for auction. If the auction price is lower than your price you will be sued for the difference (plus costs). This could easily be $30,000 – $50,000. I am guessing that equals bankruptcy.
You will be declared bankrupt and lose all your assets. That isn't the worst thing on the planet. Remember it could be worse – if you were in 19th Century Italy and screwed over the local mafia boss he would probably settle this issue with a bullet or two.
A) That is obvious, I should have been clearer. I was only referring to the $50,000 EFM portion of the loan. Of course the remainder is a standard loan.
Could you please clarify the EFM / Rismark portion. Say I buy a house and never sell it???? What happens then??? Does Rismark force you to sell the property 25 years after the loan commenced???
This shows you that councils are useless and can’t be trusted. I would get the council to put all their “rules” in writing, relying on the word of one employee is not a good idea!
yes, there are many different deeds so the accountant can help decide if you need a unit or discretionary or hybrid etc. Also the accountant can help decide who does what role. eg if you put your son as appointor you will never be able to distribute to him = one of my clients did this!
Terry,
I think this is a rare occasion where you are wrong. It is the SETTLOR who cannot receive distributions, not the Appointer.
As for accountants a lot of them are simply USELESS and know very little about trusts. Ask them what a “Hybrid Discretionary Trust” is and most of them won’t know the answer.
Thanks for your tips LA Aussie. Regarding rebuilding I would also have to factor in demolition costs as well as loss of rent. I will put in an low offer and hopefully the vendor gives in and sells it cheap.
Unfortunately if a person goes bankrupt the any transaction he/she did in the last 2 years can be reversed by the bankruptcy court. (I think its 2 years, might even be 5). This is to stop Christopher Skase selling everything to his distant relative two days before official bankruptcy, leaving nothing to the creditors. Well thats the theory….
Will the person selling go bankrupt? If you could fix that problem its a great deal. Maybe you could force the extra money ($150 – $104 = $46k) to be paid onto the second house, and force the total loan amount to drop? If the second house is worth $170k and has a loan of only $134k then hopefully the bank could get all their money from the property sale, assuming the owner defaults. This would require some interesting modifications to the contract for sale. Speak to a good lawyer!
Good luck!
PS If you do get a contract specially written up that “forces” the vendor to pay off loan x amount y on property z etc please forward it on to me so I could use as a template
In my un-expert opinion its a lot nicer if you can walk into the accountant’s office with all the paperwork and get it all done in one hour or so.
If I go to Melb or Syd I will have to post the info and hope the accountant doesn’t leave it sitting around for a year or so. I have heard bad stories of that happening!
Anyway at this rate it looks like I will be forced to look outside Canberra…..
“No Land” is actually wrong. For example you may have 10 units on 800sqm of land. So your unit has 80sqm of “real” land. Units do have some land content, obviously not nearly as good as a house though.
If you look at historical data units have gone up in price (thats a gross generalisation – specific places have their own histories). Yes units aren’t as good as a houses but they can still be a good investment.
Would you be generous enough to say which suburb / town has cashflow positive property???? Or will you wait until you setlle the property……
And now I have taken possession!
Settled on Friday, tenants moved in on Saturday – at a rent above rent estimate
Quantity surveyor also had good news for me re depreciation schedules and what I can claim this year, so It is all Systems GO.
Congratulations Peter. Now that it has settled and you own the property would you be willing to tell us which suburb you bought in?
Have you heard of a “Reverse Mortgage”? They allow your parents to borrow money against the property very easily.
The only catch is the interest accrues and they will have to sell the property when they pass away. I guess they can give their children “first option” to buy the property, but I’m not really sure.
Thanks for your advice its good to know that other people have had the same problem.
I do want the title deed in my grubby hands with no mortgage over it. Then I can apply for a line of credit at a different bank; permanently ensuring the properties are never cross-collaterised again.
I have mailed a written complaint hopefully they provide a decent response.