Hi guys,
Just a question re financing for a PPOR.
As per a recent post, I am purchasing an IP, but having considered advice from a few people and doing some more research, have concluded that it is better for me to borrow 95% of the value of the IP, maximise the tax deduction and then use, the "extra 5%" I have in cash to reduce my debt on my PPOR.
Question – and apologies if this is idiotic! If the vendor wants 10% deposit, how can I implement this if I'm borrowing 95% of the value? COnfused! Any tips on the "mechanics" would be greatly appreciated!
Ask the selling agent if the Vendor will accept a Deposit Bond for 10% instead.
Richard Taylor | Australia's leading private lender
The vendor shouldn't care if you only put down 5% as the money only sits in trust and they are not paid until settlement. The deposit is simply security. If they have a problem explain why you are doing it and how by only putting 5% deposit the house you are buying from them is more affordable. It's Win win so get that message across!
When we brought our IP the agent said something like " I guesss you'll be borrowing most of this?" & I replied with 'yeah pretty much' & was about to write a chq for 10% (or try to negotiate $500 initial deposit with the balance of 5% on approval) when the agent throws in 'well how about $100 deposit?" & the balance at settlement? He didn't even try to get anymore $ out of us when unconditional (finance approved etc).
We nearly fell over but happily kept the balance of what should have been the deposit in our a/c for the next 30 days – a win for our bank a/c without even trying!
Cheers
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