Help – this is the scenario…..
Current loan with ANZ bank for PPOR $86,000
Home Equity Loan $40,000 of which $10,000 is unused.
IP Loan $40000 bought 4 months ago and rented at $95p/w
I work part-time govt dept..husband has own business with low income.
Had valuations done on PPOR and IP property and they didn’t hit the mark in order for us to get more on our Home Equity to get a deposit….so we need deposit from somewhere!!!!!!Have seen a property we are about to put an Offer in on but after receiving bad news today re: our valuations, thinking we may not be able to go thru with it. I believe we can pick up the property for between 48,000 to 52,000 and get a rental return of $130p/w. It is a mortgagee sale and they want $55,000 for it. Our broker has just about tried every scenario is there anyone out there with any further suggestions. Broker is saying maybe only way to get it is to refinance our PPOR but I’m not overly keen nor sure about the implications of that! Please reply on this ASAP as the O&A is sitting on my kitchen table begging me to fill it in……….sq.
Can you use the $10 000 as a deposit and try for finance from another lender for this one?
Your broker has probably thought of this but has he tried all of the fringe lenders out there?
I hope it works out!
Simon Macks
Mortgage Hunter
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Sounds like fits with the 11 sec rule.
130/2 * 1000 = $65,000
I know people are pretty keen to find such properties (might be an understatement !!). Have you thought about offering it for a finders fee ? That could go towards the deposit for the next one you find !!
Best of luck with your hunt for options.
If you opt for the finders fee solution, we could be interested in discussing?
Suzieq,
You may be able to negotiate a smaller deposit, say $1000 rather than the 10% and negotiate a longer settlement period, in the hope that your situation improves over that time. If it doesn’t you may still have an opporunity to on-sell before settlement. It sounds a bit risky but you never know……..
Wish you the very best of luck.
Thanks for all your feedback guys, at present talking to father in law about him taking a loan out for $10,000 for us using none of his money (we pay the loan), so we’ll wait and see what his accountant says and if he can do it for us. I’m very determined to get this property as I feel pretty good about it and have done heaps of research on the area (have been researching for about 10 months). Our broker says (without going into our situation too much), that our only other option is to completely re-finance our existing H/E loan, IP Loan and PPOR to get this next property………we are certainly running the wire but have a strong belief in what we are doing! Will keep you all informed…thanks again..any more comments welcome SQ…[
]Suzie
$10,000 is almost 10% deposit. Could you come up with some more money from a credit card? Even at 17% interest rate, the figures may still work if the rent is that high.
Your broker might be trying to get some more commission by trying to get you to refiance everything too.
Terryw
Discover Home Loans
North Sydney
[email protected]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
Out your offer in NOW before you lose it, and include a 21 day finance period. With the leverage of a good deal behind you you WILL find a way. Why risk losing it by searching for all the answers before getting it under contract. Piers and I bought a propery earlier this week, and beat out two other investors (one who was getting finance arranged and the other who was doing a pest inspection BEFORE putting in her offer).
Putting down 10% when the contract is signed is old news! We only put down $500 on this property (purchase price 70K). Some investors are only putting down $50! That made the agents a little uncomfortable though, as you could imagine it would.
In Canada the money you give with the contract as insurance to the seller is never the full amount of your deposit needed at closing.
That’s my 2 cents!
Cheers!
Sheryl Duruz[email protected]
Brisbane QLDThere are several solutions :
1. if the house will value at more than the purchase price some lenders are prepared to increase the loan amount based on the higher valuation. One hitch though is the fact that before you can apply for an increase in the loan amount the property has to be first registered in your name. So there may be a three weeks or so delay after settlement in getting the increase in laon amount.
One therefore needs a friendly soul prepared to lend you the shortfall for a say four week period. It could be one of your parents, it could be a brother or sister or it could be the mortgage broker perhaps ?
2. Ask the vendor to carry an unregistered mortgage for the shortfall. This may cause problems with the first mortgagee. So even though any such loan is drawn up as a mortgage the lender can only register his interest by placing a caveat on the property. (which is a pretty good way of protecting the second mortgagee’s interest).
You may however encounter a problem as some lenders ask for evidence that you have the deposit which is needed to complete the purchase sitting in your bank account.
That problem too can be solved creatively.
Some unscrupulous people solve the shortall situation by coming to an arrangement with the vendors to increase the purchase price and then they are given a discount on settlement because of prompt settlement.
That however amounts to fraud as you are actually inducing the lender to enter into a lending situation where the full facts have been witheld from him.
The fact that this type of thing is probably being done each and every day doesn’t justify you doing it though.
Perhaps some others may be able to make some other suitable suggestions ?
Pisces133
Thanks guys really appreciate the feedback, offer is in at $45,000 – waiting for them to come back now…..mmmmm sitting tight. Have asked father-in-law to help with shortfall but would be nice to pay him back quick so hence was greatful for the advice of the reval once the reno was done and re-finance in order to pay him back quickly in the hope that if we need to use his money again he would gladly help. Also comments about credit card helped as we pay ours out fully every month and have $7,000 avail to us…..thank heaps hadn’t thought of that one either!!
SQ
ps: as I’m writing this the agent just rang – the financial institution has come down by $5,000 to $50,000 and she said they won’t come any lower as she could sell it easy at that price?!? I’m paniking, don’t want to lose it, but said back to her we could only go up by $2,000 – she replied, do you want to walk away from it and I said might have to, she said I’ll fax it to you and you can counter offer and we’ll go from there – what do you guys think?
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