Advice needed, doing a move from WA to Melbourne

Hi Guys,

This question is just purely expressions of intrest.
Im about to do a move to Melbourne to further study at Monash(gippsland), whereas my brother would be in Monash(clayton).

Currently we have both been looking at apartments, but I personally dont see the point of renting without any use.

We can accomodate $700-$800/week, and by July I would have a deposit of $20,000...hopefully if I dont go impulsive spending.
Apart from that Im currently working in WA, but would have to find a new job while being in Melbourne.

Even if I dont find work in Melbourne, the $700-$800/week would be paid by family.

Now I would also assume you would be thinking, that if im working/and have deposit, why not just goto a bank, well the answer is quite simple, due to religous reasons I cant anything to do with intrest rates.

So my current idea on wraps is that, I pick a house, someone vendor finances, and I end up paying roughly the same as renting, but working towards my own house.

If I didnt mention, Im elgible for first owners home grant.

Would appreciate if you can help me, or criticise but as long as its useful.

Regards

Camel_81

Hi Camel
I'm not sure what to recommend you use to search, but I do believe someone posted some information on a thread a while ago which talked about financiers who specifically work with religions that can't pay interest.
Otherwise I'm sure you could work out something with vendor finance.
I'm trying to think it through (from the wrapper's perspective!). I suppose when a loan is first set up, if interest is calculated on the total loan, then you end up with a "total amount" paid over say 25 years.
As an example, take a loan of $100,000. 25 years at 9% would give a total interest bill of almost $148,000. Weekly payments would be $193 roughly.
Now, instead of running this as a normal loan, you could start with a loan of $248,000 and you, as the wrap buyer, would then make principal only payments of $193 per week. No interest would be charged.
If you wanted to pay it out prior to the 25 years, that could be tricky, but again, if I as the wrapper ran 2 spreadsheets, one with the principal only loan of $248,000 and another with the $100,000 using P&I, then at any point in time your payout figure would be taken from the P&I loan. I have no idea how to document that!!!
I guess that's one way to solve it, but I have no idea whether or not that would be acceptable from your perspective.
Mind you, it would be nice to buy a house in Melbourne for $100,000, but these figures are only for illustration purposes!
Anyone else with some ideas?

Keep smiling
Felicity 8-)

Hi again,

If vendor finance is something along the lines of the following link, its appropriate:
http://www.mcca.com.au/housing_finance.html

Please read the housing finance section to it.

Basically these guys, buy the house, and resell it to you, for x amount of dollars as weekly repayments, the buyer is not affected by the rising of falling intrest rates.

For example you own a house which you bought(whichever method and at whatever intrest rate you are or have paid) for $200,000, then suppose on a nice sunny melbourne morning(as if they get that much sunshine), I come to you wanting to purchase that house over 25 years.

You would say sure camel, you can this house $250,000 over 25 years with weekly repayment of $193/week.

Regards

Camel_81

But Camel, what's in it for the vendor???
If I have a house that I have financed $200,000 at 30 years, 7% interest, my weekly payment is over $300 a week.
why would I want to lose $107 a week?
Now if you wanted to buy it from me for $500,000, at $384 a week, there might be an incentive for me.

Keep smiling
Felicity 8-)

Hey, I object to that....if it sooooooooooooo sunny in WA why move here???????

That really was a nasty dig at Melbourne don't you think Camel_81???????????????

Jo

Hi,

Ok Ive been thiking about this and have the guys at MCCA, although it was public holiday, i still managed.
Anyhow, to my understanding, I like a house for $200,000, I take the proposal to MCCA, they agree to purchasing on my behalf, but I need to come up with 20% deposit, which is $40,000, and they use their own funds of 80%($120,00 from $200,000)

Once they have the property under their name, they sell it on to you for any amount they wish, for arguments sake say $300,000 over 15 years(they do a maximum of 15 years).

Meaning $300,000-$40,000=$260,000 over 15 years, which turns out to be $333.33/week.

Suppose I could manage a $500,000 property with $100,000 deposit and weekly repayment of $512.82/week.
Now the only problem is where would I get such a deposit.

If anyone can resell their house to me with a lesser deposit and on set weekly terms, I would glad to proceed.
As Im not directly paying intrest, both buyer and seller have agreed to a set price and set weekly terms at which both are accepting is fine.

The weekly payments I give to the vendor is upto them, as to with them, as to pay for their loan or whatever, as I would not be involved in that.

I hope you understand my point.

Also I do apolgise for Melbourne's shine problem, but whatg can i do first impressions last, the time I went, was a nice summer day, which ended with heavy rain.

Regards

Camel_81

Hi Camel
I would guess that they have a formula they use, very similar to the suggestion I made in my original post. Being a much larger company than an individual wrapper like me, their calculations would probably be based on a lower interest rate. However the flipside is you need a much larger deposit then the average wrapper would expect. Plus you will also need stamp duty up front etc.
Again looking at it from the wrapper's perspective, as far as I'm concerned, if I've worked out a weekly payment, I'm not going to quibble about whether we call it P&I or a straight principal repayment!
Personally, I buy my houses and then wrap them, but there are others who will let you choose a house and then work out the details.
This has been an interesting exercise!

Keep smiling
Felicity 8-)

Hi Camel,

What about using a lease-option or rent-to-buy? From what I can tell there is technically NO finance provided.

You have a long term lease together with a call option to buy the house at a fixed price. You pay for the option upfront, and this can be as low as 4% of the option exercise/strike price.

It just so happens that the lease payments equate to a 30 year mortgage at x%. A part of each lease payment and the upfront monies are deducted from the price of the house. After 30 years (or earlier if you pay more pw) there is nothing left to pay and voila you transfer title.

The FHOG you can't get until you exercise your option to buy, (say you want to move after you finish uni and want to sell it) or take title.

Cheers
skippygirl :)