I’m a first time home buyer and this is my first deal, here are the details:
I’ve got 10% of the purchase price in savings.
I’ve agreed a price on a one bed unit in the Eastern suburbs in Sydney with 6 month settlement period and I move in under licence immediately.
My rational I have 6 months to save up the other 10%, saving myself 9k in morgage insurance. Otherwise I’d have to get a loan from my employer at commercial rates for the 10%. So, when I start paying the mortgage in 6 months time I’ll only be paying interest on 80% of the purchase price. I can move in now which suits as I currently rent a one bed for more than the rent agreed under licence here. Also, I don’t have to pay it till 6 months time as the owner wants to add the rent to the final payment so as not to compromise his pension.
And lastly I’m speculating a bit, but I’m hoping that in 6 months time the value will be at least the same if not a bit better!
I’ve read all the Steve McKnight books but this is the first test of my understanding of all the theory!!
Any thoughts would be really appreciated
Yes, that makes sense. You will still control the property but won’t be paying the mortgage, but will have to pay rent, which should be much lower.
Terryw
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Hi, sounds like you got yourself a deal with immediate savings already!
The part that’s uncertain is the gain in price – that depends on whether your purchase price is higher/lower or just right.
Good luck & well done!
Kum YinOriginally posted by PropertyVirgin:the owner wants to add the rent to the final payment so as not to compromise his pension.
Any thoughts would be really appreciatedJust 1 thought. Avoid shady deals. That means that you’ll need to inform the bank that the property price has been inflated by 6 months worth of rent, otherwise it’s a shady cash-back-at-closing kind of deal (fraud). If you declare this to the lender and they’re happy to proceed, be aware that there will be a paper trail leading to the pensioner. Centrelink and the tax office are very sophisticated these days.
That’s all.
F.[cowboy2]
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