Auction Property - need help financing

[Meisterin]

There is a unit which I am interested in purchasing in Campsie and the auction is on 29 April 2009. I would like to purchase the property around $200K if possible and would like to know how I can finance the property.

Here is a few info about my financial situation so someone can help me:

- first home buyer.
- willing to bid up to $200-$210,000 at the auction.
- income approx $50K gross a year.
- have around 10K cash
- have around 60K in shares (net value)
- would like to borrow 80-90% loan- IO only with 100% full offset account.
- last property in the complex(of the same size) sold for $235K last year.
- I can possibly borrow $10K from parent's for the 10% deposit required for the auction but would need to pay back on settlement.
- as the unit is owned by the Housing Commission, the vendor is unlike to accept the above an offer prior to auction.(spoke to the agent about making offer prior to auction)

I have heard that the banks do not give pre-approval and I am afraid that the bank may not value it at the purchase amount and would like to know what options I have.

 

[Qlds007]

Hi Hiflow
Ok Auctions can be scary places for unsuspecting buyers so make sure you are firm and keep your hand down when the price gets near to your reserve.

Certainly a 80-90% lvr IO with 100% offset is still available although just make sure you get yourself well prepared with your paperwork as you will probably these days need to show your lender 5% minimum genuine savings over a minimum 3 month period.(A share portfolio will probably be sufficient).

The other concern would be lenders processing time which has to be said is disgraceful at present so I would get your broker to make your application nice and early. Nothing to stop you getting your Broker to order a valuation (with an acceptable panel valuer) prior to the Auction so you have an indication of the likely max bid price.