I bought my apartment about 2 years ago for $240k i need to pay 132k to the bank, i lost my job a few months ago and have not had any luck finding a new one i have gone through my savings paying for bills and im going into the red very soon prob have enough to survive for a another month tops, i just want to know what i should do- should i sell my property which would go for anywhere from 260-290k and if i do sell is there anything i can invest in to make money on a weekly basis? should i rent it out 290-310 a week? my payments are $750 month with strata at $520 any ideas would be great any question please ask
thank youthe first thing i would do is call the bank and let them know about your situation, i know last year some banks had something where they would allow non payments for upto 1 year for anyone who lost their jobs. i would definately call them and see what they can do and negotiate to get as much time as possible. interest will build up but selling will also be costly if you take into account the taxes and commissions etc
then i would look at renting it out
Hi lucky4s
I can think of two strategies right now that have the potential to help.
1. Sell traditionally. However because of your current financial position, It will need to be a quick sale and you should possibly plan on a lower sale price than you might otherwise get (maybe the $260K area). This will give you something just over $100K when complete.
If, at any time, you look like defaulting on the loan, remember you have the "hardship" provisions of the UCCC that may give you a maximum of two months breathing space. Hardship provisions don't happen automatically. You have to apply to your lender to have these provisions put in place.
2. Sell the property with vendor finance for $290K. You can usually ask a premium price if you allow people to buy the property with a small deposit and instalments over time. Let's assume you sell for $290K, over 30 years, at 7% and the new buyer gives you $15K deposit (they can use the FHOG as part of this deposit, if they qualify). The new buyers weekly payment to you would be $422.21.
You owe the bank $132K. Let's say you ask the bank to re-amortise your loan over the remaining term and let's guess that remaining term is 28 years and your interest rate is 7%. Your payment to the bank would be $897.08 per month, or $207.02 per week.
$422.21 from the new buyer and $207.02 to the bank and, in our experience, there just aren't enough vendor finance properties available to meet the demand, so it should sell quite quickly.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
wow thanks for the advice guys will have to check up on it
Hi Lucky4s
Is the $520 Strata Monthly or Quarterly ?
If Quarterly, at a real quick count your property would be CF+ if you were to rent it out. Obviously, you would need to rent elsewhere and that would incur costs etc.
Other option would be to change the loan to Interest Only, to allow for a few extra bucks each week (i presume your paying P+I)
Not sure if you would qualify for a LOC with your current employment situation, but drawing out some of the available equity would definately buy you some time.
Ultimately, it's a good thing that you've identified that your heading for trouble and are beginning to act. As Shahabr said, the banks are very willing to help people in your situation. It's a whole lot easier for them to work out a revised repayment strategy etc with your co-operation, than to go down the path way of mortgagee repossession…strata is quarterly not sure what you mean by this does it mean i can take out money from my home value?
"Not sure if you would qualify for a LOC with your current employment situation, but drawing out some of the available equity would definately buy you some time."lucky4s wrote:strata is quarterly not sure what you mean by this does it mean i can take out money from my home value?In essence, yes.
A LOC (line of credit) is basically a extension on your current loan that you can access at any time.
The advantage of a LOC is that although the money is available to you at any time, you only pay interest on the amount you actually owe.
Some banks will want to know what you intend to use the money for. Eg. Further Investments, New Car etc.
Being that you have 130K in equity, a LOC for 20K normally wouldn't be difficult to arrange. The main thing going against you is obviously your emplyment status.
As mentioned, have a chat with your bank – preferably with a real person face to face.
Simply explain that you would really like to keep your property, am committed to getting a job etc and ask what options can they offer to assist with your 'temporary situation'.
thanks Matt! do you know what i should do with that 20k?
Survival money…
Without knowing how much you require each week to live, it will buy you time.
Use that time to either get another job, and simply resume paying off your property, etc etc
or, Use the additional time available to you to get a decent sale price for your property as opposed to a 'i have no choice except to take the first offer on my property which is 30K + below what it is really worth' sale price.
Hi Lucky4s
Must admit to being touched by your situation – has close to happened to me twice in life. Something it has made me realise, is how hard it is for both younger people, and also the 'career changers' to get a decent job when out of work. Once, I actually tossed in a job to look for work, because I felt it was unethical to be looking for somethin else while being employed – and that being ready to start 'immedaitely' would be attractive to 'prospective employers'. Unfortuanatley, you can be applying for jobs, waiting for 'job & emplyment agency plebes' with minimal experience to 'reply' to you application in less than 2 mths, , while thge world is passing you by. So…….. if you can avoid selling……do so. All I can suggest generally, is to at this point, when you are out of funds, take whatever work you can get. Whether it be casual, part time, delivering pizzas, or even working for a butt-trumpet employer – do whatever it takes to get some money in the account, while you STILL look for better work. It may involve suggesting to the twit that expects you to work for peanuts that it is your 'dream job' but if that's what is takes…….. Keep positive. You'll be fine.All the best.
thanks guys this site is a life saver thanks alot
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