I have an IP at Bellmere Q which is under contract for sale at $225K. The purchaser intended to borrow 90%but have been allowed to borough 85%due to a CRA blemish over a late payment of a telephone account. They have a short fall of $12.5K but their finance person can somehow get them an extra $7.5K leaving a balance of $5K.
My REA has suggested that I provide Vendor Finance for $5K at their loan rate which the buyer says that they will pay within 2 years. In addition,their finance person is of the view that he could get them the finance after 3 months (not sure how)
I would like to sale to proceed ,what should I do to keep it simple and equitable for all concerned?
Thanks in advance,
Herb.[blink]
hrm
I am guessing that their broker is planning to have the place revalued after 3 moths and is hoping for enough of a equity rise that they can borrow the remainder and still keep the LVR under 85%.
Put then onto a decent broker if they still want 90%[biggrin]
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
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.
Yes, Simon is correct. A telephone blemish is nothing these days. Maybe it is something more serious and they don’t want to tell.
If you want to proceed with the vendor finance, just ask your solicitor is help you out. You should probably take out a second mortgage to secure your debt. Charge them around 20% pa for the hassle, and the extra legal fees.
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
For $5000 I doubt it is worth the effort. Have them try a different broker, see if they can borrow $5000 on their credit card or from family. I imagine that anyone that can buy a home can raise another $5000 if their heart is set on it.
Maybe even reduce the price by $2000 if they can find $3000 – must be worth avoiding the legal fees to set up vendor finance?
Just some food for thought.
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
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.
Terry & Simon,
Many thanks Guys. Your comments and advice confirm my thoughts.
Regards,
Herb
hrm
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