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  • Profile photo of Brendan IrwinBrendan Irwin
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    @brendan-irwin
    Join Date: 2008
    Post Count: 2

    i would like to buy a property with 2 other friends. The banks and other lenders want a 20% deposit. We are unable to come up with this amount. We have negotiated a good price for the property but we need someone who can finance it for us. Is this possible to be done under a wrap? And is there someone out there that can help us?

    Profile photo of critter66critter66
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    @critter66
    Join Date: 2008
    Post Count: 1

    what do we do???? we own a house valued at $530K….we now have three kids and need to move closer to work , schools etc….we could get $440 rent per week but the houses in the areas we need to live in are about 700K…we are not savvy with investing, we had our heads down for years to pay the house off ,we have a joint income of $100k. could we get some advice please….

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    Brendan Irwin wrote:
    i would like to buy a property with 2 other friends. The banks and other lenders want a 20% deposit. We are unable to come up with this amount. We have negotiated a good price for the property but we need someone who can finance it for us. Is this possible to be done under a wrap? And is there someone out there that can help us?

    Hi Brendan

    What is the reason the banks will not lend more than 80%? If you look around you may find some other lender out there.

    If not, then you could try to get the seller to finance the 20% for you. This is called vendor finance and it works as though you are borrowing the money from the seller. Rates and terms etc are up to you to negotiate. it could be 5 years IO or 2 years with no interest etc.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    critter66 wrote:
    what do we do???? we own a house valued at $530K….we now have three kids and need to move closer to work , schools etc….we could get $440 rent per week but the houses in the areas we need to live in are about 700K…we are not savvy with investing, we had our heads down for years to pay the house off ,we have a joint income of $100k. could we get some advice please….

    You could rent in the area you wish to live in. You may be able to claim negative gearing on the old house, saving tax and structure it so that you can avoid CGT on this house even though you are renting. The rent on the new place should be much cheaper than what you would be paying on a loan for the same property.

    Or you could sell the old one and buy the new. There would be a lot of costs involved.

    Or you could keep the old one and buy the new one as well. The trouble with this is you would probably need to borrow 105% of the new place and pay lots of interest which would not be deductible

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Brendan IrwinBrendan Irwin
    Participant
    @brendan-irwin
    Join Date: 2008
    Post Count: 2
    Terryw wrote:
    Brendan Irwin wrote:
    i would like to buy a property with 2 other friends. The banks and other lenders want a 20% deposit. We are unable to come up with this amount. We have negotiated a good price for the property but we need someone who can finance it for us. Is this possible to be done under a wrap? And is there someone out there that can help us?

    Hi Brendan

    What is the reason the banks will not lend more than 80%? If you look around you may find some other lender out there.

    If not, then you could try to get the seller to finance the 20% for you. This is called vendor finance and it works as though you are borrowing the money from the seller. Rates and terms etc are up to you to negotiate. it could be 5 years IO or 2 years with no interest etc.

    Terry
    The property is 40 acres in size and is classified as rural.

    Brendan

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    Hi Brendan

    Have you tried Bankwest?

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of bradjebradje
    Participant
    @bradje
    Join Date: 2006
    Post Count: 39
    Brendan Irwin wrote:
    i would like to buy a property with 2 other friends. The banks and other lenders want a 20% deposit. We are unable to come up with this amount. We have negotiated a good price for the property but we need someone who can finance it for us. Is this possible to be done under a wrap? And is there someone out there that can help us?

    If the Banks are unhappy with this loan it may be a warning bell…..Be extra careful with your due diligence.
    JB

    Profile photo of v8ghiav8ghia
    Member
    @v8ghia
    Join Date: 2005
    Post Count: 871

    Hi Brendan. I'm a bit out of touch now with some of the various lenders, but CBA and NAB also come to mind as being ok with acreage. That said, most lenders will watn at least a 10% deposit, if not 20%

    They are much harder to sell these rural properties, thus why lenders require higher deposits if they ofer finance at all. (some won't look at anything over 20025 acres)
    Cheers

    Profile photo of Dean LynchDean Lynch
    Member
    @dean-lynch
    Join Date: 2008
    Post Count: 7
    critter66 wrote:
    what do we do???? we own a house valued at $530K….we now have three kids and need to move closer to work , schools etc….we could get $440 rent per week but the houses in the areas we need to live in are about 700K…we are not savvy with investing, we had our heads down for years to pay the house off ,we have a joint income of $100k. could we get some advice please….

    You may choose to sell your current owner occupied property and take any equity to your next home. If you decided to buy an investment property after that you may be in a position to borrow the whole purchase price and the fees and charges and then claim the maximum tax benefit available, it is usually a good idea to maximise the debt on investment properties as opposed to PPOR's, however, I would need to have a closer look at your position to provide some solutions based on your current level of debt.

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