With a couple of the State Governments anouncing this week they intend to launch shared equity schemes in their particular State i thought everyone else should know of an exciting new finance launch.
WEF 1st march new shared equity product is on board through one of the Banks which works along the lines of:
1) Bank lend 80% LVR which repayments are upon.
2) Super Fund lend 20% of the purchase price of which NO interest is charged whatsover.When the property is sold you do however share some of the profit with the 2nd mortgagee. The 2nd mortgage has LMI which is very reasonably priced.
In saying this serviceability is only calculated on the 80% portion being funded which means you can buy a bigger house than on paer you can show how to service.
Limited solely at this stage to purchase of owner occupied homes but investment will come no doubt.
Very post code restricted and each loan has to be booked in as there is a max limit per post code region.
Interested on the feedback of any First Home Buyers out there as to whether you would use something like this.
We are expecting to knocked over in the rush when the advertising starts up.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
Can u still use this shared equity product if your total borrowing does not exceed 80% LVR? e.g. 60% from the bank 20% from super fund
Another Q is do u have to repay both the bank and super fund at the same time? or can you choose to repay the bank first?[oneeyed]
Jazz
Yes you can go 60/20 but i guess i would ask why you would want to give someone a greater share of the equity in your home than you have to. Maybe i am missing something.
No both loans would need to be repaid once the property is sold or you refinance.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
hmmm seems good however…
as a first home buyer, how many will actually have this 20% in there super, i read something last week, most baby boomers only have 60-80k in super and unless you have salary sacrificed then you wouldnt really have enough…
PPOR well what happens if you move out of your house and rent it out, what would happen then…
in addition further id imagine interest rates would be higher, so has good potential and atleast the government is doing something…
also will this be all states (ie federal thing) or some states???
Dave
No you may have misread or i may have miss typed.
The 20% is not coming from your Super Fund but a large Industry Super Fund that is investing in 2nd mortgages.
You provide nothing other than the acquisition costs and this can come from your FHOG.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
Hi Richard
Would you be able to give us a rough idea how the bank calculates the percentage of equity the borrower sacrifices? Also, does this calculation have a “time” component in it? Thanks.
Cheers, Paul
Paul & Karen Dobson
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Hi Paul
Yes it is a simple formula:
1) 2nd mortgage 20% then they take 40% of the sale profits.
2) 2nd mortgage 15% then they take 30% of the sale profits.
3) 2nd mortgage 10% then they take 20% of the sale profits.There is no time frame on when the equity is take.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
Here’s a link to a document that explains the concept further:
AmandaBS
http://www.propertydivas.com.au
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