Scenario.
Have a very stable income (Govt)- gross 68000.
Have a neg geared invest property off plan in Brisbane city – Parklands http://www.pradella.com.au/parklands – that is very unique – check site. Cost 283000 May last year. Due to settle in May-June 05 though! Commonwealth Bank valued it now at 315000. I have put 28300 of cash in. So technically that money is in trust until I settle in 05 and I so don’t actually have anything. Not the best way of doing business in hindsight but hey! Also could not get a Dep bond but that is another story but nothing to do with credit issues.As at today I have identified several Pos geared properties around 100-110000 mark that I am interested in purchasing and are well supported by research.
I have been told by an investor friend that 95% of finance lenders will say NO but he is convinced if I pitch it, I may get someone who will lend me equity on the first property even though it has not settled yet. I did not think this was possible because I do not actually own the equity! But anyway, who am I to argue with a guy who has lots of property.
The best I can get is Liberty loans who will do it based on the valuation but three months out, not 14 months or so. Commonwealth will also do it on valuation but not until it settles. If Liberty will do it at three months, why not 14? If it was another negative geared prop I would understand fully.I can do it other ways such as sell my second car (13-14000) and we have 5000 in a managed fund. We have a single income (my wife stays home with our baby). We do also get a tax free income from another source of 7000 per year.
Also do not have own home – we move too much!Any advice would be appreciated. Afterall, if I do not have to use my own money/sell the car, then great.
Kramer
[8D]I’m Kramer
Serenity Now!Hi Kramer
As far as I can see you cannot access any funds from the Parklands property yet, not unless you are able to substitute the deposit you paid for a deposit bond now, but I would imagine the developer (Pradella) would not want to do this.
Nevertheless, I could organise you a 90% mortgage with the 10% deposit made up from a personal loan. Effectively 100% finance, you would just have to come up with the costs eg: stamp duty, mortgage insurance etc.
Feel free to e-mail me on [email protected]
Regards
Brendon
Acute Mortgage Reductions
‘Better Finance for More Homes Sooner”Apologies Kramer
I lie! You could more than likely borrow the costs too!
Brendon
Acute Mortgage Reductions
‘Better Finance for More Homes Sooner’Or what you could do is receive a gift from the vendor for deposit.
If negotiate the property down $11k on $110k listing price or 5-10% depending on location.[email protected]
Property Solutions – Real Estate,Finance,+ve cashflow,wraps,flips,building – Property Solutions>>Or what you could do is receive a gift from the vendor for deposit.<<
As long as one realises that in essence this is fraudulently obtaining money from the lender by deception.
Don’t worry, we all will send you a X-mas card if things blow up. [
]Luckily your broker will keep you company in jail. [
]Pisces
Good call Pisces!
There are some ordinary brokers/people out there that will encourage borrowers to do some wild things(particularly abuse low doc loans). People – DON’T LET YOUR THIRST FOR WEALTH AND PROPERTY GET IN THE WAY OF YOU ETHICS. Make sure you never lie or deceive a lender.
Cheers
Stu
Exactly.
I was going to delete those posts but I will leave them as a warning to others.
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Thanks for the advice Brendon. That is probably the route I will have to take if I cannot go the other and then wait three months out before i can use the equity.
Ahh Kylie, thanks for the advice but i like my own house not the big house with bars on it![
]
Plus if you end up going down that road, you only lose in the end.cheers
Kramer
[8D]I’m Kramer
Serenity Now!Yes, I agree that you cannot use equity on a property you have puchased off the plan until you settle. This is because you don’t actually own the property, and there is a chance that settlement may not take place.
BTW, nearly every bank will lend on currnet valuation if the contract is more than a year old.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Terry
Yes, Kramer should be able to lend on valuation as it will be more than 12 months.
For those of you in Brisbane though, is the Parklands development classed as a Brisbane CBD highrise?
If it is, I would imagine Kramer will have a hard time getting 90% LVR from any lending institution?
What are your thoughts on this Terry?
Regards
Brendon
Acute Mortgage Reductions
‘Better Finance for More Homes Sooner’Brendon
yep. if it is classed as inner city, then the loan may not be able to be mortgage insured, and then it would be a 80% lend.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Kramer,
Be very cautious of Brendon (alias Geronimo at Somersoft). Read the posts concerning him & the companies he is affiliated with in this thread at Somersoft & draw your own conclusions: http://www.somersoft.com/forums/showthread.php?s=&threadid=14038
Cheers,
Aceyducey
Currently it is at 80% LVR and I didn’t know that most lenders wil take the valuation after 12 months so thanks.
As at today CBA valuaed it @ 315000 so when it does settle Aug next year I should be right with any further input.
Guess it is on for the other option of Pers loan (deposit) and loan.
Interesting Somersoft read too.
At this stage ethough all I am looking at is options.By the way are rural areas all around 80% LVR?
Thanks all for the advice. Much appreciated.
Kramer
[8D]I’m Kramer
Serenity Now!Kramer
Sounds like you have it sorted and are on the right track.Better to check on the status of the location of Parklands, as you may run into a few lenders who will not lend 80% on inner city apartments.
Good luck!
Brendon
Acute Mortgage Reductions
‘Better Finance for More Homes Sooner’
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