Hi All,
I have searched through the forums for info on buying rural houses, and it seems that you would require a 30 -40% deposit as the banks see the houses difficult to re-sell if things went pear.
So if a house is worth $350.000 you would need $105,000 for a 30% deposit, would that be correct ?
If I do have my math right, how would locals manage to save up such a large deposit ?
Who told you that? Speak to a broker. I've not heard of anyone having to pay 30-40% deposit.
It all depends on the actual location.
Each lender has a different policy on this – some that have an underwriting authority with the LMI provider may be more lenient in providing higher LVR's for certain locations.
However, to get an idea of areas that LMI will consider, you can suss out these two websites:
http://www.genworth.com.au/lender-resource-centre/tools-and-resources/location-guide-australia/
http://www.qbelmi.com/pg-Location-Wizard.seo
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Guys,
Thanks for the reply's
We have a young family in one of our properties in Alpha, Qld, who are saving a deposit to buy there first home.
We know they like the house and my wife and I discussed the idea today of selling it, I thought I would try and figure out what deposit they would require before I emailed them.
After searching through these forum's I figured if the deposit had to be 30 – 40 % then there would be no point in getting there hopes up.
Vendor finance an option?
Hi Derek,
That is an option, It would feel like we were a bank.
National Credit of Dubstep ( QLD )
Dubstep,
Yes, it's true that you would act somewhat like a bank, although there are some advantages for both you and the buyer if you did vendor finance.
For the buyer, if you did vendor finance then the buyer would not have to go through stringent loan application procedures that may rule them out from a conventional loan. Also, you could decide to let them buy the house from you for a very small deposit or you could even finance their deposit too.
For you, the advantage of vendor finance is that you could slightly raise the interest rate for the buyer, higher than the interest rates that banks are using, so that you actually can get some cashflow, but it also helps since you're taking on the risks.
Hi Matthew,
Thank you for your advise.
Would we would still liable for maintenance of the property as we would still remain the owners ?
I think that would depend very much on the terms of your contract. I think you could suggest certain types of maintenance for the buyer, but the title still remains with you.
The advantage of this is that the buyers are likely to maintain the place and keep it well because their increased sense of ownership, but you still have title so just in case they default on their payments and contract obligations, you can take the property back from them.
That's from what I know, but I think you'd need to talk to your lawyer about this carefully.
Hi Matthew,
Thanks for the clarity, it sounds quite appealing.
I may become the CEO of NCoD ( Qld )
Does anybody have a vendor finance arrangement set up or be able to provide any pro's or con's ?
Cheers
The CEO
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