All Topics / Help Needed! / Off the plan apartments

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  • Profile photo of Naremburn123Naremburn123
    Member
    @naremburn123
    Join Date: 2008
    Post Count: 61

    Hey guys,

    Can anyone offer advice or guidance regarding off the plan apartments and whether they tend to be valued ok on completion etc.

    Would you advise doing it?

    Will the banks lend on it?

    What type of deposit is required?

    And what are the potential problems I may run into?

    Cheers in advance!  

    Dean

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Hi Dean

    OTP purchases can be higher risk/higher reward.

    In a rising market, an OTP purchase can do very well. This is due to the lengthy time between exchange and settlement – during this period, your OTP purchase may have experienced some growth and could be worth more upon settlement – everyone loves instant equity!.

    However, on the flipside, what happens if the market goes backwards and your left with a property that's worth less than you've agreed to pay for it? It's not pretty.

    Banks will lend on OTP – no dramas there.

    The deposit required is generally 5% (if using cash) or 10% if using a deposit bond. To be elligible for a long-term deposit bond, you'll have to demonstrate that you have sufficient equity within other properties. You can get a a quote for a deposit bond on the Deposit Power or Deposit Access websites. I think it was Deposit Access that requires less equity in existing properties.

    Do a search on this forum (and some general googling) and you'll find more in-depth info about the pros and cons of this approach.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Naremburn123Naremburn123
    Member
    @naremburn123
    Join Date: 2008
    Post Count: 61

    Great.

    Thanks Jamie,

    I really appreciate you taking the time to provide that feedback.

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    No worries at all Dean, you're welcome. Best of luck with it.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

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