Browse Forums Home Finance 1 Sep 27, 2010 9:03 pm Hi all. Hoping someone might have a suggestion for us. Husband and I need to buy another place. We have a home currently that is far too small and we would like to start a family in the next few years but have literally nowhere to fit a baby let alone a small child. We had looked at renovating... But given all the costs, were considering just buying another house. We both earn high incomes. We have about $15k in shares but clearly this won't be enough to cover a deposit plus all the fees. We have not paid much extra in our home as we have worked hard over the past 2 years to pay down nearly 100k in HECS-HELP debts. Our current lender won't refinance (it's a crazy PITA non-bank lender who I wouldn't want to lend through again anyway). As far as I know, we don't have much equity probably only about 50k. Would prefer to hold on to this one as an investment and not sell preferably. Are there any options out there these days for people in our position without a cash deposit? We can save one quickly, but a perfect property has come up for sale this week and the price is good so will sell quickly. Re: Financing options without enough deposit 2Sep 27, 2010 9:17 pm Your best bet is to either sit down with a broker / bank manager to go through all the figures. Lenders can look at refinancing your existing loan as well as unlocking the equity to assist with the new purchase. It will all come down to valuations / serviceability / amount of equity. For instance without mortgage insurance they can look to lend you 80% of the value of each property less your existing debt load. If this amount doesn't cover the refinance and the purchase then you would be looking at mortgage insurance becoming involved. Some things are worth waiting for. Re: Financing options without enough deposit 3Sep 27, 2010 11:44 pm Hi Geo, Would need more info on your situation but you may be able to use some of the $50k equity as the deposit. Suggest you use two different lenders, one for your current property as an investment and a new loan with a new lender for your new property. This will keep your mortgage insurance costs down as I don't think $50k equity would be enoygh to avoid LMI. As I said, would need quiet a bit more info to ensure the best way to go Glen Re: Financing options without enough deposit 4Sep 30, 2010 9:13 am There are some lenders that allow you to refinance at 95% LVR (very few allow this these days). This would allow you to release funds as a deposit. The problem is that LMI would be expensive if you borrowed 95% on the old property and then 95% again on the new property. The option you may like to consider is a family pledge home loan where your parents use their property as additional security for your loan. This avoids LMI entirely, gives you the same competitive interest rates & allows you to buy with little or no deposit. This option isn't for everyone, it can be messy getting your family involved and you are putting their property at risk. So do your research, discuss it with your parents, and if you do apply for a guarantor loan then make sure you take out income protection & life insurance to at least cover the amount of the guarantee. If you are to borrow 95% of the property value plus LMI on your own merits then you would need approx 9% of the purchase price in savings to cover the costs. This is 5% for the deposit and around 4% to cover stamp duty & conveyancing, depending on which state you are in. You may just need to bite the bullet and save as much as you can or you can consider selling your old property. Most of the time, council will push you out to a private certifier as it ties up their limited resources. Where a builder has gone belly up, the certifier passes the file… 7 5347 This certainly doesn't look good. I would be engaging with an independent inspector to have a look at this. As for the unscheduled site visits, most builders are quite… 1 28161 Elvis has left the building... The site supervisor quit after 2 month on the project. I guess he was just instructed to bark at people, but didn't like when he was… 26 20827 |