Reply: 1.1.1.1.1.1.1
From: Michael G
Hi,
You really have to think about what you mean when you say 100% loan.
Any lender will lend you 100-110% to buy a property, as long as they have enough equity or collateral to meet their LVR requirements.
Or you can see is one will capitalise certain borrowing costs like mortgage insurance, this can change the LVR to near 98%.
Or if the Vendor you are buring from will give you finance, say 5-10% of the asking price, then if you borrow the rest from a lender, that also gives you a 100% loan.
You could even put down cash and then turn around and take out a personal loan to cover the purchase costs and deposit. If its for an IP, you could even claim them possibly as a tax deduction (that is if you have the right doco to say the money you put in was just on loan). This too would make the deal 100% financed.
You could use any number of combinations, I almost forgot Solicitors Funds and 2nd mortgages to bring the LVR up to 100%.
Here's a thought... with interest rates so low, think about the rates offered by term deposits. I think their about 4-7% right?, well if you need $5-20k for a deposit, think about the benefit you would be offering if you're willing to pay 8-10% of these sums if the Vendor would be wiling to lend you the money.
Besides, this money doesn't really exist anyway, he's not actually giving you this money to spend. This money is created out of thin air based of the "value" you place on their property. Remember they bought the property for a lessor sum, their mortgage should be even smaller, so what ever money you draw down from the bank, will cover this debt and then sum. So they will make a profit and get to see some cash, but this way they create a cashflow from a property they don't even own anymore. How much more positive cashflow could that be??
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