Hey guys,
Can anyone offer advice or guidance regarding off the plan apartments and whether they tend to be valued ok on completion etc.
Would you advise doing it?
Will the banks lend on it?
What type of deposit is required?
And what are the potential problems I may run into?
Cheers in advance!
Dean
Hi Dean
OTP purchases can be higher risk/higher reward.
In a rising market, an OTP purchase can do very well. This is due to the lengthy time between exchange and settlement – during this period, your OTP purchase may have experienced some growth and could be worth more upon settlement – everyone loves instant equity!.
However, on the flipside, what happens if the market goes backwards and your left with a property that's worth less than you've agreed to pay for it? It's not pretty.
Banks will lend on OTP – no dramas there.
The deposit required is generally 5% (if using cash) or 10% if using a deposit bond. To be elligible for a long-term deposit bond, you'll have to demonstrate that you have sufficient equity within other properties. You can get a a quote for a deposit bond on the Deposit Power or Deposit Access websites. I think it was Deposit Access that requires less equity in existing properties.
Do a search on this forum (and some general googling) and you'll find more in-depth info about the pros and cons of this approach.
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]
Great.
Thanks Jamie,
I really appreciate you taking the time to provide that feedback.
No worries at all Dean, you're welcome. Best of luck with it.
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]
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