Break costs

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From: Jeanette .


I have a house on the market. If I pay out the loan, I will have to pay break costs on settlement. Does anyone know whether lenders (in my case St George) will let me 'park' the money with them until I find a replacement property and then take the security over the new property. I don't want to have to pay establishment fees over again when I know I will be buying again within a few months. Thanks. Jeanette
 
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Reply: 1
From: Rolf Latham


Hi Jeanette

You are looking for "portability". Is it a fixed rate loan, and what sort of period are ypu looking to park (few months = ?)

If not fixed rate, then Discharge fees for security etc will probably still be incurred as may new val fees. Usually not a whole lot of diff between portable loan cost and re-establish.


Ta

Rolf
 
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Reply: 1.1
From: Jeanette .


It's a fixed loan for 3 years at 6.29%. I have only had the loan for 4 months. The reason I am selling is because I can't rent the house out. There is a flood of properties for rent at the moment and an oversupply of houses for sale in my area so I will probably have trouble selling too. The agent wants me to sell it for less than cost price and I absolutely refuse to so I might have a bit of a wait. Anyway, as soon as I sell it, I will start looking to buy in a better area. But I don't want to be pushed into buying a property quickly just because I have to give St George a substitute security right away. If you are wondering why I haven't rung St George and asked them this it is because they have a fee (I think it's about $160) for a scenario calculation (work out break costs etc) and I don't want to put a specific scenario to them until I know I have a buyer and am in a firm position to know what I am doing. - Look if worse comes to worse, I will pay out the loan and go somewhere else but there is a psychological thing here - I don't want to let down my mortgage broker by breaking the loan so soon after taking it out. Have you heard of anyone parking their settlement proceeds with a lender until they are ready to buy a new property (for about 4 months)? Thanks Jeanette.
 
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Reply: 1.1.1
From: Rolf Latham


Hi Jeanette

No I havent with a fixed rate loan :eek:)

Doesnt mean that it cant be done in some way.

STG should not charge you for asking the flexibility option, since there is nothing to calculate.

Maybe wrap the place ? or Lease option

Kind of you to look after your broker - perhaps he/she can help ?

Ta


Rolf
 
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Reply: 1.1.1.1
From: W W


Jeanette

Have you thought about trying some of Henry Kaye's tricks to find tenants? Such as throwing in a washing machine or other whitegoods? This may work out to be cheaper than selling it. You could also claim this off your tax. I've heard of one guy who also threw in a car as an incentive.

Out of interest can you tell us where it is?

WW
 
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Reply: 1.1.2
From: Michael G


Jennette,

While you're searching for solutions, spend a few $$ and test the market and see if someone wants to buy you out?

Maybe something like "Tired of renting?, no deposit, want your own home?. Try rent to buy, for details call xxxx"

Basically structure a payment schedule where you are not negative and recoup all your costs.

Worst thing, no calls and you continue looking.

Second worst case, you do it and in 12-24mths you're out with no cost to you. In the meantime you looks elsewhere.

Michael G.
 
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Reply: 1.1.2.1
From: Jeanette .


The house is in Glen Alpine, one of the better areas of Campbelltown, NSW. Too many new subdivisions and builders selling so there is an oversupply. I did try a few things. I put in a very large all weather pergola to make a nice outdoor entertaining area and then I put in a big split air conditioner. I am going broke very quickly. I have dropped the rent to ridiculous levels. I have been trying to sell it or rent it since September last year. I have been through several real estate agents. I appreciate your helpful suggestions but the way I am feeling, I just want to get rid of this millstone around my neck and get out of Campbelltown and invest in a better area. The trouble is - Campbelltown is a first home buyers paradise so everyone is vacating their rented premises to buy their first home. But my home isn't a first home - it's a step up from that. So I'm caught both ways - too many rental properties to compete with and not what firsthome buyers can afford in a house. Don't worry - I'll get through this, although I have been so low that I thought I would be through with real estate forever. Bye for now.
 
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Reply: 1.1.2.1.1
From: The Wife


This is a terrible scenario your in Jeanette, may I ask what attracted you to Camberwell?

Have you tried the heading "Dog Friendly" on your advertisement?

or

"$1.00 Bond Required"

or

"Student accommodation"

or

"Open House"

or

"cottage to call home"

or

a combination of the above?

They have all worked for me, the word cottage is very powerful, people love open houses, dog people are nuts and do silly things for their dogs,student accommodation is something students sometimes try to hide when they apply for housing, $1 bond is a great pull for a lot of people as they dont have a bond, sure, you have no bond, but right now, you have no money from rent, maybe do a 6 month lease with no bond, and then a 6 month lease with a 'build up of bond, sat $5 per week extra to go to bond"

Rather than spend $160 on St George for getting your break costs ( what a dumb thing St George should be hauled over the coals for that), spend $160 on a decent advertisement in the 'to let' pages of the paper, maybe something like :

Camberwell.

$1 Bond

This lovely cottage to call home, has a relaxing pergola for you to sit under with friends over the summer months, your dogs are welcome, asking $1 bond, as I want to give some young family a chance to set up home in this delightful house, open house day is xx/xx/xx, dont miss it, someone will be chosen on the day, students welcome, a/c carport $xxx.00 p/w

What do you think?

TW


~I don't want to achieve immortality through my work; I want to achieve immortality through not dying~
 
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Reply: 1.1.2.1.1.1
From: Jeanette .


When the agency agreement is up with the current agent, I am going to pay someone to set up a web page for me (which will be referred to in the newspaper ads) and I will use some of your suggestions in the advertising. But I do want to sell it. I've had it. Enough is enough. I didn't mention this before because I didn't want to complicate the story but on top of everything else, a carload of teenagers crashed their car into the house and I am waiting for the insurance builder to do the repairs. I can't believe I am having so much bad luck. Things have got to be better for me next year (I have to think that otherwise I will go crazy). Bye for now.
 
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Reply: 1.1.2.1.1.1.1
From: The Wife


How much do you want for it Jeanette?

TW
~Life is a daring adventure, or nothing at all~
 
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Reply: 1.1.3
From: Paul Hendriks


Jeanette

You can park your funds, & still keep the loan (which has to be portable) but must be covered by the same amount as the loan, with your funds.

I know you can do this with Westpac, not sure about the others.

Only a newbie, but I can contribute that info...

Regards

Paul
 
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