I have a situation needing advice. We are buying out in-laws on a property. In-laws have found a house and land package they want. Went for a loan for the deposit on the house and land package and were told banks dont do this. They are eligible for FHOG, have no other deposit and no other debt.
My question is, can you not borrow for the deposit? The total amount of borrowing is 10% of the value of the property and they will be paying cash upon settlement for the balance.
You have to have the collateral to be able to borrow the deposit for another property. Say you had a property worth say $400,000 but only had a loan of $100,000 against it then you could borrow a deposit for another property. In this case you decide to add the two properties values together and get a deposit bond for the deposit as together the two properties add up to say $800,000 in Value and total loan is $500,000 then you have enough collateral to get a deposit bond for when the loan comes through and you can pay the bond back.
A little bit confused about your situation We are buying out in-laws on a property? What sort of property are you buying out from in-laws is it an investment property purchased after 2000 ? Why I am asking is because if they own property already purchased prior to 2000 will they be able to get FHOG ? or if they already own a residential property they can't get FHOG. Some states allow prior purchase after 2000 if investment property it varies from State to State of OZ. My question is, can you not borrow for the deposit? The total amount of borrowing is 10% of the value of the property and they will be paying cash upon settlement for the balance.
You normally can get a line of credit loan but I think in this situation the in-laws are selling the first property and then buying another property in this situation what some people do is get a bridging loan. see below – not recommending a lender just highlighting the product your in-laws may be after