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  • Profile photo of toni89toni89
    Member
    @toni89
    Join Date: 2004
    Post Count: 125

    Hi all hope you can help.

    I have a situation needing advice. We are buying out in-laws on a property. In-laws have found a house and land package they want. Went for a loan for the deposit on the house and land package and were told banks dont do this. They are eligible for FHOG, have no other deposit and no other debt.

    My question is, can you not borrow for the deposit? The total amount of borrowing is 10% of the value of the property and they will be paying cash upon settlement for the balance.

    Looking forward to hearing from you

    Regards

    Toni

    Profile photo of crjcrj
    Participant
    @crj
    Join Date: 2004
    Post Count: 618

    Can they get a deposit bond?

    Profile photo of toni89toni89
    Member
    @toni89
    Join Date: 2004
    Post Count: 125

    thanks for your reply. Not sure, never had to do it. Do you know what the requirements are?

    Profile photo of ducksterduckster
    Participant
    @duckster
    Join Date: 2004
    Post Count: 1,674

    You have to have the collateral to be able to borrow the deposit for another property.
    Say you had a property worth say $400,000 but only had a loan of $100,000 against it then you could borrow a deposit for another property. In this case you decide to add the two properties values together and get a deposit bond for the deposit as together the two properties add up to say $800,000 in Value and total loan is $500,000 then you have enough collateral to get a deposit bond for when the loan comes through and you can pay the bond back.

    The main point is that you will have the funds at settlement. It is not used to keep the bank happy but rather the selling vendor happy.
    have a look at this site for more insight into deposit bond requirements
    http://www.depositpower.com.au/dpg/purchasers?quicktabs_4=0#quicktabs-4

    A little bit confused about your situation
    We are buying out in-laws on a property?
        What sort of property are you buying out from in-laws is it an investment property purchased after 2000 ?
        Why I am asking is because if they own property already purchased prior to 2000 will they be able to get FHOG ?
        or if they already own a residential property they can't get FHOG.
        Some states allow prior purchase after 2000 if investment property it varies from State to State of OZ.
    My question is, can you not borrow for the deposit? The total amount of borrowing is 10% of the value of the property and they will be paying cash upon settlement for the balance.

    You normally can get a line of credit loan but I think in this situation the in-laws are selling the first property and then buying another property in this situation what some people do is get a bridging loan.
    see below – not recommending a lender just highlighting the product your in-laws may be after

    http://www.commbank.com.au/personal/home-loans/our-borrowing-options/bridging-finance.aspx?cid=dsm
    http://www.anz.com/personal/home-loans/refinancing-home-loan/bridging-finance/
    http://www.xinc.net.au/home_loans/bridging_loans.html
    http://www.aussie.com.au/home-loan/selling-guide/sell-or-buy-first.htm
    http://www.aussielegal.com.au/forum/forum_posts~TID~6188.htm

    Not sure if this will help your in-laws but sometimes the right question to ask the bank can make a big difference like asking if a bridging loan can be used.

    Profile photo of toni89toni89
    Member
    @toni89
    Join Date: 2004
    Post Count: 125

    Thanks for your info. Sorry its taken me so long. The house has been in the family for 20 years and we are buying half of my sister in law.
    cheers

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Are you asking if it is possible for the in-laws to borrow the 10% deposit to use when purchase a property.

    Generally personal loans are not available for this sort of thing.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

Viewing 6 posts - 1 through 6 (of 6 total)

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