Hi,
I’m looking to buy a property with a view to subdividing and would like to apply for the St. George No deposit Home Loan due to the amount fo cash I have available to invest. The only trouble is that the maximum purchase price for this loan is $600K and the house will probably sell for around $625K-$650K.
Is it possible to buy the house for $600K and have a separate contract to buy the shed on the property for $25-$50K? I know there might be issues with the stamp duty payable to the state government but couldn’t you just have a separate contarct for the shed and pay stamp duty on that also?
Any ideas on how to legally get around this as it will really affect my ability to do the deal if I have to stump up 10-20% for the deposit to buy the place.
Life is like a box of chocolates – you never know what you’re going to get!
Hi Dobby
The max limit on the SGB No deposit loan is $600K and they will not go past that. Certainly you can come to an arrangment with the Vendor to purchase the chattels separately but obviously will end up paying cash for them.
Must admit i can so no benefit in you doing so.
If you were considering purchasing the shed for say $25k-$50K and pay cash would you not be better off taking a 95/97% loan and on the full sale price and only putting down 3/5% which would be less than the $25-$50K amount anyway.
You could capitalise the LMI on top so it would nearly be a 100% loan. With SGB you have the Loan Equalisation Fee which you are not able to capitalise and this amounts to 2.5% of the purchase price anyway.
95% means you only need to put in around $31.5k – $35k and the rate will be a lot lower. Use the rest of you savings to undertake the subdivision.
Richard Taylor
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If you have no funds/equity to put into the deal then try another 100% lender.
Watch out for deferred establishment fees, especially if you’re looking at short term lending. i.e. 1 to 3 years. Cheers.
Regards
Steven
Mortgage BrokerMobile Mortgage Market
Ph: 0402 483 216
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http://www.mobilemortgagemarket.com.auPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
The $600K limit is for major cities as well, it is $500,000 outside of these areas (from memory, Sydney, Brisbane, Melb).
I also cannot see the point in having a separate contract as you would have to pay cash for the shed.
Terryw
Discover Home Loans
Parramatta
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Thanks guys for all the advice. I like the idea of the 95/97% loan with the ability to capitalise the LMI. Would there be any early redemption fees on a loan of this type – I plan to have the whole deal done and dusted from purchase to final sale of property and subdivided block in an estimated 12 months.
Life is like a box of chocolates – you never know what you’re going to get!
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