All Topics / General Property / Is this mortgage broker being honest with me?

Viewing 6 posts - 1 through 6 (of 6 total)
  • Profile photo of Karl and RitaKarl and Rita
    Member
    @karl-and-rita
    Join Date: 2003
    Post Count: 103
    October 28, 2003 - 6:59 am

    Hello again,

    OK, firstly my situation:

    My father is selling me a house for $93,000. The real estate values it at a possible $130,000. This gives us equity of $37,000. We were going to refinance at a later date to gain access to this money to invest in property.

    Now, we received advice from a mortgage broker who told us to put on the sale contract the value of $130,000, and then get my father to “say” we’ve already paid him a deposit of $37,000, therefor gaining access to the equity immediatley.
    In actual fact we’ve not given this deposit to my father.

    Is this mortgage broker trying to pull a swifty to get a higher cut from the bank? Is this a legal manouver? [?]

    Thanks [:P]

    Karl

    The future belongs to those who believe in the beauty of their dreams. – Eleanor Roosevelt

    Profile photo of melbearmelbear
    Member
    @melbear
    Join Date: 2003
    Post Count: 2,429
    October 28, 2003 - 7:12 am

    I wouldn’t think it would make that much difference to the mortgage broker to make it worthwhile for them.

    Couple of things – you’ll have to pay stamp duty on the higher value, but you might anyway as it’s not a ‘arms length’ transaction if you are buying it for less.

    The bank may also only lend you based on price so if you do buy at the lower price may find you have to come up with the deposit anyway. Also with the higher price, if it’s not your dad’s PPOR, he will have to pay higher CGT – but again may have to as it’s not an arm’s length transaction.

    I would check out the above with your accountant/solicitor to make sure you do the best thing for both of you.

    Oh, another thing, if you pay a lower value, and it’s not your PPOR, and you sell down track, you will be paying higher CGT – so I guess the govt gets you any which way.

    Cheers
    Mel

    Profile photo of shanebalshanebal
    Member
    @shanebal
    Join Date: 2003
    Post Count: 16
    October 28, 2003 - 8:32 am

    Another thing Karl,

    The bank will probably want a registered valuation, not a real estate estimate. These can be two very different amounts.

    Regards,

    Shane

    Profile photo of Karl and RitaKarl and Rita
    Member
    @karl-and-rita
    Join Date: 2003
    Post Count: 103
    October 28, 2003 - 8:36 am

    Thanks guys,

    Good point shanebal, also I forgot to add that we already have $20,000 deposit cash in bank. I just wanted to know if this was an ethical way to do things because we want to keep our integrity in our dealings.

    Again, thanks

    Karl and Rita

    The future belongs to those who believe in the beauty of their dreams. – Eleanor Roosevelt

    Profile photo of Mortgage HunterMortgage Hunter
    Participant
    @mortgage-hunter
    Join Date: 2003
    Post Count: 3,781
    October 28, 2003 - 8:50 am

    Karl,

    Call me for a chat. I am not after stealing his deal but would rather keep any advice between the two of us.

    Cheers,

    Simon Macks
    Mortgage Broker
    [email protected]
    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of BillfromozBillfromoz
    Participant
    @billfromoz
    Join Date: 2003
    Post Count: 381
    October 28, 2003 - 9:24 am

    G’day Karl….

    Please take Simon up on his offer and call him.

    I was about to respond to you, but better that you speak with Simon. I am sure we would both tell you the same thing mate.

    Bill

    Bill O’Mara
    Real Estate,Mortgages,Share Market Strategies.
    [email protected]

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

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