Hi guys and Girls
Myself and my partner currently rent a house for $470 p/wk and are interested in approaching the owner about a vendor finance deal for the house we currentlyt rent.
The property has just come onto the market for $430,000 and believe it is a very good deal even at that.
Due to myself being a franchisee/self employed and us lacking in a 10-20% deposit for a lo doc loan we need to get creative with finace.
How would i best approach the owner with a finace deal that works best for both parties?
We have about 10-15K for a deposit and can afford above $470 for repayments
any advice would be amazing
thanks
Paul
Hi Paul
Couple of ways to think about the financing of the deal:
1) Ask the vendor if he would be prepared to sell the property under Vendor Terms either using installment finance or similar.
2) Look at a lodoc loan for say 70-80% of the purchase price / valuation and then either get the Vendor to provide a 2nd mortgage carry back (Limited lodoc lenders that will allow this but they are out there) or use a 2nd mortgage Company that offers such private financing.
Hate to say you will pay a higher interest rate for a 2nd mortgage and it is likely that the loan will need to be a P & I loan but structured correctly you may find you have created additional equity by buying under market value in the first place.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks for reply
That sounds quite interesting, Do you know of any lenders that do the second mortgage or are you able to set this up?
I actually emailed you all the details of my partner and i earlier today regarding mortgage advice.
Thanks for your time
also if i have claimed the first home owners grant on one of my other properties can my partner claim her grant on a property we buy together?thanks
Hi Paul,
Well done on asking those questions here.
I agree with Qlds007 – you could propose to your landlord to buy house on installments, which is very popular at these times. The main thing is really to understand what is the reason for your landlord selling the house and understanding him would give you a lot of answers for you.
And yes, your partner can claim a grant if properties are bought together.
Good luck!
HI Paul
No i hate to say if you define your partner as your spouse then regretfully no you can't claim the FHOG a second time even if she purchases in her sole name.
Refer to the OSR in your State for definition of 'Spouse'.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Paul
Hopefully you got my reply.
I am actually in the UK for Xmas and New Year but still working.
I did respond to you so feel free to come back to me and i can certainly try and guide you in the right direction.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hate to say Prime that is incorrect.
Paul would not qualify for the FHOG or State equivalent if he or his partner buy individually or together another PPOR once he has claimed the Grant on the initial property.
The Stamp Duty concession might be different depending on which State she buys in.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Paul
I suggest you go with Richard's suggestion as it's spot on. There is another technique, called Rent To Own but, if I were you I'd follow Richard's suggestions, in the following order:
- Deposit Finance with either the vendor carrying back a second mortgage or securing a commercial second mortgage, or
- Instalment Contract, i.e. a standard Contract for the Sale of Land with an Instalment Payment Schedule added, or
- A Lease and an Option (often called a Rent To Own). Possibly only consider this if the other two techniques are not acceptable.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
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