Hi,
Have a friend trying to buy a property and need advice.
Friend signed contract with an offer of $435k on a house. While negotiating, agent principal has come back to buyer and told them that the Vendor needs $445k due to having a 2nd mortgage on property so cannot reduce price anymore as banks would not release deeds if not paid out in full. Banks will take the house in 2 months if not sold? Believe the house is in a good captial growth area – 15% in next 12 months.
Any suggestions on creative purchasing, as they are stretched on how much they can borrow or should they run the opposite direction?
You friend has little alternative as the agent is correct if the loan is not repaid and the vendor has not made arrangements with the lender to clear up the possible negative equity then they will not release the mortgage.
In saying this if your comment about the Bank taking the house in 2 months is correct the vendor would be severally in arrears (A lender cannot not start action until the borrower is 3 months in arrears) and litigation well underway and hoping for a Court hearing shortly. Why doesnt your friend wait and look to buy the property when it is mortgagee in possession.
Richard Taylor | Australia's leading private lender
Qlds007 wrote:You friend has little alternative as the agent is correct if the loan is not repaid and the vendor has not made arrangements with the lender to clear up the possible negative equity then they will not release the mortgage.In saying this if your comment about the Bank taking the house in 2 months is correct the vendor would be severally in arrears (A lender cannot not start action until the borrower is 3 months in arrears) and litigation well underway and hoping for a Court hearing shortly. Why doesnt your friend wait and look to buy the property when it is mortgagee in possession.
Thanks Richard.
Do you know how long it takes for house to get to market once mortgagee is in possession?
Once the Bank have been granted the Possession order it would be immediate.
Richard Taylor | Australia's leading private lender
Thanks Richard.
Another Question – if a lender puts a 2nd mortgage on a property, then what is maximum amount/% they will borrow against house valuation (eg 95% of valuation)? Is there a limit all lenders have or do they do it on circumstance?
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