All Topics / Finance / carry back!!!

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  • Profile photo of lordoftheundeadlordoftheundead
    Member
    @lordoftheundead
    Join Date: 2008
    Post Count: 31
    November 25, 2008 - 12:11 pm

    hi guys,

    i'm just wondering how it would be possible to get a 1st mortgage from a lender when you intend to have a carry back 2nd mortgage for say 10% of the purchase price from the vendor.

    would a lender be willing to lend the 90%?

    would a lender lend 90% if you had that in savings but did not wish to use it?

    would a lender accept the use of additional security?

    what if i also put down 10% and the lendor only finances 80%?

    any thoughts would be much appreciated

    cheers

    pete

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    November 26, 2008 - 3:10 am

    These days lenders won't approve these sorts of deals if they know you are borrowing from the vendor. Maybe some of the smaller private type lenders would with a higher deposit, but none of the majors would.

    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 lordoftheundeadlordoftheundead
    Member
    @lordoftheundead
    Join Date: 2008
    Post Count: 31
    November 26, 2008 - 12:24 pm

    thanks terry,

    can i ask how the differs from the example below?

    my understanding is a discretionary trust can be loaned funds from say me (a beneficiery) and these funds can then be used as a deposit to purchase property, i can even sell my own property to the trust which i (the vendor) would have in effect lent the buyer (trust) money to purchase property from me – in my eyes this is the same outcome by a different process.

    am i missing someting?

    regards

    pete

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    November 26, 2008 - 11:55 pm

    Hi Pete

    If you were selling to your own trust it should be ok.

    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 lordoftheundeadlordoftheundead
    Member
    @lordoftheundead
    Join Date: 2008
    Post Count: 31
    November 27, 2008 - 9:28 am

    thanks again terry, 

    I thought that may be the case, i am just trying to figure out why lenders wont accept it any more.

    Are there ways that you can get a mortgage for say 80% from a traditional lender and pay the 20% deposit  then have the lender take out a 2nd mortgage?

    I assume this is possible however would like some thoughts on ways to do it

    Thanks again

    Pete

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    November 27, 2008 - 1:20 pm

    Pete

    They would accept it for a trust deal, but wouldn't for a straight purchase as the person buying is deemed to be less attached to the house – since they haven't risked any of their own cash.

    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

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