Well, we got involved a couple of years ago and place 5% deposit on a $525,000 2 bedroom apartment which is due to settle soon. Over a year ago we put a 10% deposit on a studio apartment ($360,000 property). Also due to settle soon. Had the studio contract sent to solicitor for checking and he said all OK it is just a standard contract. However the studio is ony 37 square meters and we didn’t know there would be a problem financing anything under 40-45 square meters.
On top of our deposits we have another approx $120,000 (maybe more) savings. We are self employed and the way our business has been set up, the tax returns do not look great. We get our income as a repayment of a personal loan we lent the ltd company so therefor tax returns do not look good but we have altready paid the tax on the money we lent the company! Accountants make sure you do everything to minimse tax!
SO basically banks are asking for 40% deposit on the studio which is using up all our cash and then we have not enough cash for the 2 bedroom one.
I really wish I never did this and if I could transfer the studio one to another purchaser I would. (It is in & nominee) so does anyone know how we do this? The stamp duty is only $3,000 so I suppose it would be good for someone. Or can 80% finance be got anywhere on things less than 40 sq m.
We do not own a house to live in in Australia. We do own a large house with lots of equity but it is in the UK.
On top of that, our solicitor never even told us that it was a problem getting finance and when we queried him on his advise, he said, “get a solicitor and I’ll see you in court!”
Any help/advice would be greatly appreciated.
Thanks.
Re the above post by me. I should have mentioned that the 2 bedroom one is in North Melbourne and the studio is in Sandringham.
Thanks.
Hi try my finance person Jodie on 0413229929 and our accountant on Mark Ault on 0409000019. I am not sure it is a solicitors role to advise you on getting the finance- but this IS a trick for young players. Jodie is REALLY good at helping people get finance in your situation. I would get another solicitor if that is his attitude though. Dont see him in court- it is just not worth it- find someone who has a better attitude. I like my solicitor though. email me if you need more help.
CheersJust thinking out loud – is the 2 bedder now worth more than you initially paid due to the time factor? There may be some equity there?
The options you have are going to be heavily dependent on what you overall financials look like. Having a good accountant should not hinder you if the person organising your finance knows what they are doing, the lender should not look just at the business financials or just at your personal financials, if they are all considered together and you can follow how the money flows, then you should be able to use your real income rathert than just the number on your tax return.
The reason this is so important is because you are going to have a relatively small number of options for the studio, but even less if you can't use a full doc loan.
It's not the job of your solicitor to advice you on finance, its not even an area they would generally be competent in. You need a good broker. There are plenty on here.
REgards
AlistairYes, Alastair is right- and Jodie can help you this all of this. Don’t stress and take one step at a time. Yes, you could on- sell one of the units. People do this- put on contract and sell before it settles. If it is worth more now- then there will be a capital gain to pay- but if you are making money then paying tax is a good thing. That is – you should try to minimize your tax but if you are paying lots of tax it means you are making LOADS of money. I’d like to pay Lots of tax every day= I’m making lots of money.
As Alastair says- you need a good broker. I have come across plenty in my time running women in property but not many are able to work with figures – you need an “investment broker” – one who invests too is even more helpful.
I had my solicitor look at my contracts – their job is to advise on the working of the contract- not on finance.
As I said in my previous post- the size of the unit thing is a bit of a trap that you are not told about. I guess that is why it is wise to mix with like minded people who have been there before.Or you could PM Alistair who has offered good advice – he’s an excellent contributor to the forum and he’s also a broker.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
You won't be able to nominate someone else unless you had a prior written agreement with the nominee prior to you entering the contract or they will have to pay stamp duty in addition to you.
However, you may be able to rescind the contract if the vendor has not taken all precautions such as giving you the complete contract. So take your contract to another solicitor and ask them to help you get out of it – if you want out.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
We seem to be in a right pickle! With the little information you have provided publicly in this forum it would appear there may be possible negligence and failure to disclose from more than one party/professional. You must have these matters addressed BEFORE settlement is effected (and you probably already knew this). If you hyave no luck having these matters resolved, please feel free to drop me an email and i'd be happy to have a closer look at your legal options 'pro bono'.
Thank you very much for your advice. It has actually made me feel A BIT better!
I didn’t think my solicitor should have given me financial advice. But I think he should have risen my awareness to the size of the unit and the potential problem with banks not wanting to finance it (happy to be corrected again if anyone feels different)
I would like to not buy the studio and will see what an other solicitor thinks. If I have to proceed, (hopefully, otherwise we risk losing deposit) I am hoping I will get someone to look at what we see is a strong financial position although it doesn’t look it on paper. Ideally if I could get a financial institute to do 90% finance on the studio and then I can use the rest for deposit on 2 bedroom. By the way I agree that definitely the value has gone up on the 2 bedroom but the bank I spoke to said they will only use the $525,000.(contract price) Maybe I need to finance this one first and THEN have it re-valued and hopefully have some equity for studio.
Went to look at both properties today and the North Melbourne one is going to be ready earlier than Sandringham studio and both due to settle within 4 weeks.
Any more advice greatly appreciated.
Thanks
ALF1, looks like we were typing at the same time and our posts crossed. Thanks for your advice. I will email you.
Not sure where the property is located but if you want a good Investment orientated mortgage broker you can go past Alistair.
He is based in Melbourne but it doesnt matter these days with modern technology emails / skype / fax and even the good old fashioned telephone.
I am sure Jodie is excellent at her job but why not give Alistair a ring and get some experience on your side.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thank you again for comments. I am going to deal with it this week. It is a worry.
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