All Topics / Help Needed! / Desperately need help

Viewing 12 posts - 1 through 12 (of 12 total)
  • Profile photo of dboddy21095dboddy21095
    Member
    @dboddy21095
    Join Date: 2003
    Post Count: 2

    Approximately 18months to 2 years ago my husband (Paul) and I bought 2 off the plan properties which were meant to settle about 6-12 months apart. The one is Sydney was three months late and the one in Melbourne was 12 months early and both were down to settle mid-March 2005. We went to the bank and they agreed to lend us the money for Sydney but not Melbourne. After much discussion they agreed to give us bridging finance on Melbourne after we have a signed contract for Sydney. Settlement for both was 18/3/05 (they even fell on exactly the same day). We put Sydney on the market straight away and are now paying penalty fees on Melbourne until settlement (the builders have given us to 13/5/05 or they will rescind).

    Other points of note:

    We really don’t want to sell Sydney, we would prefer to keep the Sydney property and sell Melbourne. We have been told by an agent that we would get between $480 and $500 a week rent (others in the block have been renting for that amount).

    We have approximately 40-45% equity in our own home.

    The money to be borrowed is the amount plus stamp duty on Sydney and will be the amount plus stamp duty (which will be apparently $5,000) plus the penalty fees (which is working out at about $1300 per week). We have paid no deposits (got them both with deposit bonds).

    We have been to 3 lenders – our bank, a broker from Melbourne (the lending institution approved the loan but the units and our house were very undervalued), and another broker from Sydney who has one last resort to try and has not yet got back to us.

    The Sydney unit has been on the market since 18/3/05 and has had about 6 people through but no takers.

    Any suggestions

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    What exactly is your problem? ie why couldn’t you get an approval for Melbourne? Is it serviceability? Location?

    I would suggest you talk to another broker. If you have enough equity in your property, then it may not be much of a problem.

    Some questions:
    What do you mean by bridging finance for the Melbourne one? Has the bank agreed to lend you the money for this one as long as the Sydney one is to be sold?

    What is the value now compared to purchase price?

    Terryw
    Discover Home Loans
    Mortgage Broker
    North Sydney
    [email protected]

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

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of ANUBISANUBIS
    Participant
    @anubis
    Join Date: 2003
    Post Count: 559

    How about selling your home and moving into the Sydney/Melbourne unit as applicable? Might not be the preferred option but may save you from losing everything.

    Profile photo of FFCommFFComm
    Member
    @ffcomm
    Join Date: 2004
    Post Count: 627

    I am with Terry on this one, what are you hoping to achieve?

    As aside apartments are harder to sell for a number of reasons:
    1. They are exacty the same as other apartments.
    2. Prices are dictated by other sales in the building.
    3. Oversupply of apartments.
    4. The market has fallen dramatically.

    The boom is over and so if you are desperate to sell you may have to lower your price or change the apartment (i.e. make over time), of course that costs money…

    FFComm

    Profile photo of foundationfoundation
    Member
    @foundation
    Join Date: 2005
    Post Count: 1,153

    dboddy,
    I would strongly advise you to get qualified advice from a solicitor, property valuer (not a REA appraisal) and a financial planner. You need to know what your options are and which has the greatest chance of the best outcome. For example, can you walk away from the Melbourne apt losing only your deposit or will the developer persue you for their losses? If you can manage to organise finance for both IPs what will be the cost to you (financial / lifestyle / stress etc)? How long will it take you to break even on these investments? How long will it take for these investments to bring the returns you initially bought them for? In other words, you need a realistic goal and a plan engineered to get you there.
    Good luck with it all, let us know how things pan out.
    Regards, F.[cowboy2]

    Profile photo of brahmsbrahms
    Participant
    @brahms
    Join Date: 2004
    Post Count: 485

    out of interests sake, what will happen with the deposit bonds if you don’t/can’t complete the transactions? (ie.default on contract?)

    to my knowledge you have to have finance approved to get a deposit bond – is this the case?

    if the finance was formally approved what happenned? are the vals short?

    cheers

    brahms
    CALL NOW…adults only (boys and girls ask mummy or daddy first) ~~ 1900 HOT BROKER ~~

    Profile photo of dboddy21095dboddy21095
    Member
    @dboddy21095
    Join Date: 2003
    Post Count: 2

    Replying to all above (will try to answer all questions) – thanks to you all for reading this and coming up with suggestions.
    Firstly – Terryw. Could get Melbourne due to serviceability. Have spoken to 1 bank and 2 brokers – bank says enough equity and not enough serviceability, 1 broker says not enough equity and enough serviceability and the 2nd broker says not enough serviceability, will hopefully find the equity. Re bridging finance – the bank will give us the money only on a signed contract for Sydney. The value – Melbourne is less than what we paid for it; Sydney is around the same we paid for.
    Anubis – Don’t own Melbourne yet so not an option; Sydney is a 2 bedroom unit and as we are 2 adults and 3 children under 10 is not really possible.
    FFComm – changing the apartment – it is brand new so there is nothing to really makeover.
    foundation – have been to solicitor, property valuer (but not a financial planner). Walking away from Melbourne is an option BUT as we only paid a deposit bond, would still have to come up with the deposit, and the contract says the developer can persue us for the difference; our solicitor in Melbourne will try to change that if we get really desperate.
    brahms – if we default on the contract we have to pay out the deposit (which we think we can arrange) or the deposit bond company will sue us for the deposit and we will get a bad credit rating. We did not have to get finance approved to get the deposit bond – don’t know why.
    Thanks again

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    Hi

    Sounds like you may need a second (or 4th) opinion on the finance side due to the conflicting stories. You must have a fair bit of equity in your home with that low LVR.

    Feel free to send me your figures and I will check them out.

    Terryw
    Discover Home Loans
    Mortgage Broker
    North Sydney
    [email protected]

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

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TorachanTorachan
    Member
    @torachan
    Join Date: 2004
    Post Count: 68
    Originally posted by dboddy21095:

    Approximately 18months to 2 years ago my husband (Paul) and I bought 2 off the plan properties which were meant to settle about 6-12 months apart. The one is Sydney was three months late and the one in Melbourne was 12 months early and both were down to settle mid-March 2005. We went to the bank and they agreed to lend us the money for Sydney but not Melbourne. After much discussion they agreed to give us bridging finance on Melbourne after we have a signed contract for Sydney. Settlement for both was 18/3/05 (they even fell on exactly the same day). We put Sydney on the market straight away and are now paying penalty fees on Melbourne until settlement (the builders have given us to 13/5/05 or they will rescind).

    Other points of note:

    We really don’t want to sell Sydney, we would prefer to keep the Sydney property and sell Melbourne. We have been told by an agent that we would get between $480 and $500 a week rent (others in the block have been renting for that amount).

    We have approximately 40-45% equity in our own home.

    The money to be borrowed is the amount plus stamp duty on Sydney and will be the amount plus stamp duty (which will be apparently $5,000) plus the penalty fees (which is working out at about $1300 per week). We have paid no deposits (got them both with deposit bonds).

    We have been to 3 lenders – our bank, a broker from Melbourne (the lending institution approved the loan but the units and our house were very undervalued), and another broker from Sydney who has one last resort to try and has not yet got back to us.

    The Sydney unit has been on the market since 18/3/05 and has had about 6 people through but no takers.

    Any suggestions

    Sounds like you gambled and lost. Relax. It’s only money. Had a young child die today in the back of my ambulance today. If I could change one of the scenario’s I can assure you that you’d lose the lot.

    Funny. This whole forum is about making money. Guess that’s your priority. Mine is to raise a well rounded family without drowning in debt. Just trying to understand why the hell I can’t afford a house of my own. The greed on this forum is almost breathtaking. Don’t bang on about retirement. Just don’t leave your kid near a pool unsupervised.

    Air goes in and out. Blood goes round and round. Any variation is a bad thing

    Profile photo of harry_mrharry_mr
    Member
    @harry_mr
    Join Date: 2004
    Post Count: 1

    That is a reality check which most people dont get. Life is about about happiness, with or without money or houses its irrelevant whatever can make you happy for the time you are here.
    Dont worry if you cant afford your own house yet things will change in your favour soon.This overheated and crazy price boom is finished.

    chris

    Profile photo of francislfrancisl
    Member
    @francisl
    Join Date: 2005
    Post Count: 32

    Hello, dboddy.

    I just start learning investment and not yet make my first deal. However, I hope my 2 cents thought may help.

    1. There are a few mortgage brokers participating in this forum often. Why don’t you contact them? They have good understanding of property investment and may be able to help.

    2. Have you tried other option like money partner or on sell the deal to other investor?

    3. If you run out of options, why can’t you sell your home to release capital? It might be a smaller home, but we shouldn’t spend more than we could afford. Having a big home than we can afford is violating this rule.

    Finally, please calm down, step back and look at the big picture again. There must be a way out.

    Wish you work your way out quickly!

    Regards,
    Francis

    Profile photo of pfsfinancepfsfinance
    Member
    @pfsfinance
    Join Date: 2004
    Post Count: 171

    Sounds like you need help fast. If you want to email me the figures and postcodes etc. I can ring a couple of funders and mortgage insurers and see what I can do. I am a state manager for a mortgage manager and deal with brokers but I have direct access to credit departments of funders and can then point you in the right direction with what broker to use. That deals with the funder that you need.

    e: [email protected]

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