Hi Chas,

You’ve got good equity and your income situation is stabilising—this puts you in a better position than you might think.

A short-term 2nd mortgage or caveat loan could be a viable option to clear arrears and position for a refinance, but do be mindful of costs. These are best used for 1–6 month bridging, not long-term.

Maintaining clean statements now is key—most lenders (including Bendigo) will want to see 3–6 months of stability. A specialist lender or private funding (via a broker) could help get you there faster.

Happy to chat if you need more guidance.

Really interesting idea, Mish. In most cases banks want buyers to show at least 5–10% of genuine savings, so if the deposit is vendor-financed it can reduce borrowing power. Lenders also get cautious if there’s a caveat involved. You don’t need a special licence, but it’s definitely worth having a solicitor draw up the agreement properly and maybe run it past a broker first so you know which banks might accept it.

Unsecured Lo-Doc loans are rare, especially on short notice. Most private lenders still require some form of security — often a second mortgage or caveat over property — but they can fund in 24–72 hours.

For a cashflow-positive purchase like yours, a private lender or specialist broker is your best bet. Rates are usually around 1–2% per month, but the upside is speed, flexible criteria, and no need for full financials.

Feel free to contact us at Knote for fast, tailored funding options before your deadline.

Caveat loans can be lucrative, but they’re not low-risk. As others pointed out, a caveat doesn’t give you power of sale—it just flags your interest on title. If the borrower defaults, you’re behind the first (and possibly second) mortgage, and enforcement may require court action.

To clarify a few common questions raised here:

Why can’t the borrower go to a bank?
Usually due to timing (banks are slow) or documentation issues—not always poor credit.
Can a caveat holder foreclose?
No. Unlike a registered mortgage, a caveat doesn’t give enforcement rights. You’d need to take legal steps to recover funds.
Is 3–4% per month too good to be true?
Not if the deal is structured well—LVR under 70%, solid security, and a clear exit strategy (like sale or refinance). Otherwise, yes—it’s risky.
Should you trust a solicitor to screen deals?
That helps, but you still need your own legal and financial due diligence. Don’t rely on someone else’s word—especially if they benefit from the deal.
Bottom line: great returns can come from caveat lending, but only if you know the risks, protect yourself legally, and go in with your eyes wide open.