Hi Hopeful
Firstly sorry to hear of the situation you find yourself in.
Unfortunately their is no lender that will offer a > 80% lodoc refinance at a sensible interest rate and set up costs these days.
Even at 80% or below lodoc refinancing is becoming a product of the past.
Lenders are very much rating their risk and some of the interest rates i have been quoted on deals recently would make your hair stand on end.
Richard Taylor | Australia's leading private lender
I am very sorry to read of your predicament, it is indeed a terrible situation to be in and I wish you the best outcome………….However, I do believe you have only one option and that is to sell the property you are in and rent, keeping the holiday rental. Applying for credit cards will only see you in greater, serviceable debt. Best of luck
Just sell it and clean up your own mess!!!
There is no other option…Just be aware it is likely that you won’t see any of the money from the sale of the property, as I imagine that if they are cross-collateralised, ANZ will just take the money to service what is owed against the other property.
You should be seeing selling as a way to reduce debt and ease your cashflow problems, not as a way to fund your living costs.
I am sorry to hear your broker has stuffed up so badly, you should put his name on the forum for everyone to see, our broker messed our loan also, and we nearly lost everything, thankfully we got through it okay but I should be charging my ex broker for all the hair dye I now use.
It sounds like your idea if works will be great and you and your husband should be commended for having a go. If it was mine I would do what ever it took to get it furnished, maybe use your own furniture and live in a caravan park for a while, we looked for work anywhere in australia and split up forces to keep the money coming in, my husband worked in wa for eight months while myself and the children lived in nsw and did pamphlets and any work I could get as low paid as it may be. keep tryingstop blaming brokers or any one else for your situation, we should all take charge and be responsible for ourselves.
sometimes circumstances change and to lighten the burden, your only choice is to reduce debt, before it's taken out of your hands.Hopeful
The situation you and your husband are in is regrettable, but you are literally at the crossroads and there are only two options; pay up or sell up. Your bank has already extended you several months of grace, and they are not obliged to. Soon enough they will call in your loan and you will lose the property.
Regarding refinancing to buy yourself time to find work; realistically, unless you can immediately make up the arrears and keep the loan in good conduct for 6-12 months, no lender will refinance you. It's really that black and white. From what your post suggests, that's not possible. Im afraid that its black and white- you will not be able to refinance from your current situation.
It doesnt matter whether you try for full doc or lo doc. Neither the lender or their Mortgage Insurer will approve a refinance or any additional advance to any loan account that is in arrears or has been in arrears. I am not wishing to be brutal, but you will be considered a credit risk by any lender. Leaving conventional lenders and seeking private funding will only further exacerbate your situation. Once debt becomes unmanageable, it quickly spirals. If you seek a solution through a much higher rate, via private finance, you will only be burying yourself.While you can, you should cut your losses. Sell one of the properties, downsize your expenses by renting as cheaply as possible, securing work ( move back to your previous location if necessary)… but the bottom line is that you have to sell. If you do not, it's highly likely the bank will sell and they don't care what they get for the property as long as they get their money back. You could lose most or all of whatever equity you currently have in the property.
Hopeful1 wrote:Hi crjBefore I answer, thanks to Kylie for your advice and suggestions.
Of course Yossarian I have taken the advice on board. That is why I started this in the first place. I wanted advice not criticism.
Does anybody get themselves into this position by choice?
We have found ourselves at this point, because we trusted a broker who promised everything and ended up doing nothing and still to this day has not said that it couldn't be done. He just stopped answering my calls. So, because we are naive, we let it go almost to the point of no return by trusting him, and now we want to finish what we started and not let him ruin it all for us. We were never supposed to be in this situation, but our loans have blown out because he didn't get what we asked for and there were so many delays and extra costs involved that has brought us to now.Probably what I was hoping for from this forum, was that one of the brokers on here would have said that they knew of a loan, at not too high interest, that would enable us to get higher than 80% low or no doc that would give us a buffer for the time that we would move out of our house and then establish it to holiday rent – and finally we would earn some income over the coming holiday period. That problem solved. Then we could move ahead without all this pressure.
But now I know its not that easy.
Our current situation is that
1. My husband is working casually. It is helping us to catch up on bills but is not recognized by banks for 12 months
2. We are in the process of applying for a low interest credit card
3. We will apply for a business loan – which is very involved as there is so much information needed to prepare financial plans etc which I have no knowledge of at this stage
3. We want to move out and rent – but can't yet because we have no money for a bond. So we have to wait.We have thought about renting this unfurnished too. But that won't cover the mortgage etc. Holiday rental is the way to go in our situation.
At the end of the day though, any way that we can keep this house is a good way!
There is one thing I have thought of after reading other posts – can we start an SMSF and sell half of our house to it? I have read that you must be arms length and we wouldn't be living in it others would be renting it, and if we get the business loan (hubby has had ABN more than 2 years) it would be business premises? I'm not sure about that so is anyone can tell me more, that would be great.
So at this point we are still hangin' in there, but only just!
Still Hopeful1
You are trying to borrow your way out of trouble without genuinely asking yourself how you got there.
Hint : It's not your mortgage broker.
3. We want to move out and rent – but can't yet because we have no money for a bond. So we have to wait.
If you can't even find the money for rental bond, I think you better sell out both properties. There is NO way out unless
you win a jackpot.
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