All Topics / Finance / Loan for deposit?

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  • Profile photo of j21j21
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    @j21
    Join Date: 2012
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    July 3, 2012 - 3:36 am
    TheFinanceShop wrote:
    j21 wrote:
    TheFinanceShop wrote:
    Hi Kate, You can either cross securitise (i.e use the equity in other properties which you own) or you could possibly take out a personal loan to cover the deposit and stamp duty. The latter option is obviously dependent on a number of things but I would need more information. Regards Shahin Afarin – Property Finance Consultant http://elitepropertyfinance.wordpress.com

    I am in the same situation as Kate. How do I go about taking a personal loan? Cross securitise is not the option to go for me, as my current residential property do not have equity yet)

    Hi J21, Taking out a personal loan is not an issue. The issue is your specific scenario and ensuring that it fits with the lender's policy criteria. Are you looking to borrow the minimum deposit of 5% plus stamp duty or the 20% plus stamp duty? What is the property purchase amount? Regards Shahin Afarin – Property Finance Consultant http://elitepropertyfinance.wordpress.com

    Hi, thanks for the reply.

    I am looking to borrow the 10% deposit ($50,000), with the purchase price around 499K. The location is inner city suburb, with no new developments for the next couple years.

    Stamp duty is covered by the developer and the rest of the 90% loan is not payable until Q3 2014 when the apartment is built. I was told that I can organise the loan six months before that.

    Rental of the apartment is appraised at 550 per week.

    Me and my husband earns around 150-155k per annum combined and he previously had a 375k loan for our current home that had no equity yet.

    So what I can do next?

    Profile photo of TheFinanceShopTheFinanceShop
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    @thefinanceshop
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    July 3, 2012 - 3:45 am
    j21 wrote:
    TheFinanceShop wrote:
    j21 wrote:
    TheFinanceShop wrote:
    Hi Kate, You can either cross securitise (i.e use the equity in other properties which you own) or you could possibly take out a personal loan to cover the deposit and stamp duty. The latter option is obviously dependent on a number of things but I would need more information. Regards Shahin Afarin – Property Finance Consultant http://elitepropertyfinance.wordpress.com

    I am in the same situation as Kate. How do I go about taking a personal loan? Cross securitise is not the option to go for me, as my current residential property do not have equity yet)

    Hi J21, Taking out a personal loan is not an issue. The issue is your specific scenario and ensuring that it fits with the lender's policy criteria. Are you looking to borrow the minimum deposit of 5% plus stamp duty or the 20% plus stamp duty? What is the property purchase amount? Regards Shahin Afarin – Property Finance Consultant http://elitepropertyfinance.wordpress.com

    Hi, thanks for the reply.

    I am looking to borrow the 10% deposit ($50,000), with the purchase price around 499K. The location is inner city suburb, with no new developments for the next couple years.

    Stamp duty is covered by the developer and the rest of the 90% loan is not payable until Q3 2014 when the apartment is built. I was told that I can organise the loan six months before that.

    Rental of the apartment is appraised at 550 per week.

    Me and my husband earns around 150-155k per annum combined and he previously had a 375k loan for our current home that had no equity yet.

    So what I can do next?

    Hi J21,

    I would need a little more information before – are you able to email me your details and also the details of the property?

    Also re off the plan purchases please be careful and make sure you invest the money and have a good solictor review the terms and conditions of the contract, e.g. the last thing you want is to get to Q3 2014 and be advised that the construction has been delayed for another year or more.

    TheFinanceShop | Elite Property Finance
    http://www.elitepropertyfinance.com
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    Residential and Commercial Brokerage

    Profile photo of luke86luke86
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    July 3, 2012 - 5:07 am
    TheFinanceShop wrote:

    Also re off the plan purchases please be careful and make sure you invest the money and have a good solictor review the terms and conditions of the contract, e.g. the last thing you want is to get to Q3 2014 and be advised that the construction has been delayed for another year or more.

    Or even worse get to Q3 2014 and find out from the bank that the property is valued at $450k, not the $499k contract price. This would make it very hard to settle if you have already borrowed $50k for the deposit somehow and have no equity in your current properties.

    Cheers,
    Luke

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
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    July 3, 2012 - 5:16 am

    Exactly my thoughts and hate to say the proof of the pudding is in the eating and i am seeing it happen every day of the week.

    There are a few products that offer an unsecured loan at around 15% with no CRAA which certainly helps when it comes to credit scoring on the main loan.

    I would run a mile at such a deal on an off the plan basis.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of kateej03kateej03
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    July 9, 2012 - 7:42 am

    HI Guys,

    Just bumping this one back up. I just wanted to see for the one I'm looking at has a 16.4% return (not off the plan) with 2 houses being rented for a fixed term. Would borrowing the deposit and stamp duty be ok if we plan to pay off the higher interest loan quite quickly or would it still not be such a good idea?

    Thanks,

    Kate

    Profile photo of Richard TaylorRichard Taylor
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    July 9, 2012 - 7:29 pm

    Personally i still wouldnt buy an off the plan property especially with so called high yielding returns.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of kateej03kateej03
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    @kateej03
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    July 9, 2012 - 10:49 pm

    The property is NOT off the plan.

    Profile photo of TheFinanceShopTheFinanceShop
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    Post Count: 1,271
    July 9, 2012 - 11:10 pm
    kateej03 wrote:
    HI Guys,

    Just bumping this one back up. I just wanted to see for the one I'm looking at has a 16.4% return (not off the plan) with 2 houses being rented for a fixed term. Would borrowing the deposit and stamp duty be ok if we plan to pay off the higher interest loan quite quickly or would it still not be such a good idea?

    Thanks,

    Kate

    Hi Kate,

    What’s the amount of the deposit and stamp duty, what is the rental amount after the fixed term, what is the rental figure during the fixed term and how long is the fixed term?

    Shahin Afarin – Property Finance Consultant
    http://elitepropertyfinance.wordpress.com/

    TheFinanceShop | Elite Property Finance
    http://www.elitepropertyfinance.com
    Email Me | Phone Me

    Residential and Commercial Brokerage

    Profile photo of Pat007Pat007
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    @pat007
    Join Date: 2012
    Post Count: 71
    July 9, 2012 - 11:21 pm
    TheFinanceShop wrote:
    kateej03 wrote:
    Thanks for the replies. I am the same as j21 don't have equity so would need a personal loan. Is there any kind of security required? I have seen a few loans around 15% does this sound about right? Thanks, Kate

    Hi Kate, You would need to get an 'unsecured' personal loan. Bendigo Bank have one at 13.49% and ANZ have one at 13.99 %. Make sure you get an pre-approval for the new loan before taking out the personal loan. Regards Shahin Afarin – Property Finance Consultant http://elitepropertyfinance.wordpress.com

    The Bendigo Basic Black Credit card has two unusual things going for it, around 12.45% on credit AND cash advances (normally banks sting you on anything they consider a cash transaction up to 22% in some cases) as long as you can get a high enough limit, this would beat even their Personal loans if your looking at that option. in a seperate thread im enquiring about the tax implications of this.

    Profile photo of kateej03kateej03
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    @kateej03
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    Post Count: 112
    July 10, 2012 - 4:33 am

    Thanks Pat007,

    I'll look for the thread now.

    I have also just asked the agent whether the vendor would consider a vendor carry back option of 20%…..will see how that goes.

    Kate

    Profile photo of Marty McDonaldMarty McDonald
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    July 10, 2012 - 1:05 pm

    Some bad advice in amongst some good..for mine.

    Borrowing via a p/l is very rarely a good idea. Crossing to boot. AVOID.

    Marty McDonald | Mortgage Experts
    http://mortgageexpertsonline.com.au/
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    Profile photo of kateej03kateej03
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    @kateej03
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    July 11, 2012 - 2:59 am

    I have spoken to my broker re borrowing 80% and the vendor financing 20%. He has said for the particular bank he is looking at that they still need to see we have the money in the bank for the 20%.

    If this is the case, how can this strategy work!?

    Thanks,

    Kate

    Profile photo of TerrywTerryw
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    July 11, 2012 - 3:04 am

    Very difficult to find a lender willing to allow vendor finance of 20%.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Mick CMick C
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    @shape
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    July 11, 2012 - 3:13 am

    Non conforming lenders.

    kateej03 wrote:
    I have spoken to my broker re borrowing 80% and the vendor financing 20%. He has said for the particular bank he is looking at that they still need to see we have the money in the bank for the 20%.

    If this is the case, how can this strategy work!?

    Thanks,

    Kate

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
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    Same Banks. Better Rates. Served With a Passion.

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