How to secure next PPOR before selling current one

[neil100]

Hi all

My wife has already found the property she wants as the next PPOR the trouble is we haven't started to market our PPOR yet!

We wouldn't have the money lying around to put a deposit on this property until we got a deposit for ours. The new property is empty (deceased estate I think) so may be able to negotiate a longer settlement and we expect our PPOR to sell quite quickly.

Had anyone any tips or suggestions on how we could secure this new PPOR given the circumstances? Or should I just let the wife down gently

Thanks
Neil

 

[Propertunity]

Exchange contracts on the new PPOR using a delayed settlement and a very small cash deposit or more usually a deposit bond (which will only cost a couple of hundred $).

 

[neil100]

Exchange contracts on the new PPOR using a delayed settlement and a very small cash deposit or more usually a deposit bond (which will only cost a couple of hundred $).

Thanks Alan,

I guess the REA will push for a 5-10% deposit, but might accept a small cash deposit? What size deposit were you thinking?

If not, then where who provides deposit bonds and is there much competition between providers?

Cheers
Neil

 

[Jamie M]

Hi Neil

The two major players are deposit power and deposit access. Both have quote calculators on their website that will allow you to work out the cost.

To get a short-term (ie. less than 6 months until settlement) bond you generally have to prove that you've been approved for finance. For a longer-term bond (6 months or more) you have to demonstrate that you have a certain amount of equity built up.

Are you able to covert your current PPOR into an IP? Have you crunched the numbers to see if this is possible?

 

[neil100]

Hi Neil

The two major players are deposit power and deposit access. Both have quote calculators on their website that will allow you to work out the cost.

To get a short-term (ie. less than 6 months until settlement) bond you generally have to prove that you've been approved for finance. For a longer-term bond (6 months or more) you have to demonstrate that you have a certain amount of equity built up.

Are you able to covert your current PPOR into an IP? Have you crunched the numbers to see if this is possible?

Thanks Jamie, I'll take a look at the calculators.

I think erviceability is the issue preventing turning the current PPOR to IP but it certainly had crossed my mind!

Thanks

 

[RumpledElf]

Hahahahahahahaha *cough* urm, right.

We are doing this right now. Various banks either decided that we will rent our current house (need a written appraisal) or refuse to accept that we will have it rented or sold and thus we will be servicing the debt on the old house ad infinitum.

Due to the new rules we also can't get the loan we want so we are officially recognised by various banks as being a family of 5 on a combined income of $45k (we're on more than that but banks won't accept the balance of our income as income) and servicing two mortgages with no rental income.

Someone actually gave us a loan for the new house though. Thankfully both loans are quite small.

If you get your house under contract you can probably get bridging finance at least, we're building so no such luxury.

 

[tom1000000]

I would sell my current property first, but on a longer settlement period, say 6 months.

Then in those 6 months you can find the property you want to buy.

 

[Propertunity]

I guess the REA will push for a 5-10% deposit, but might accept a small cash deposit? What size deposit were you thinking?

I was thinking 5% but knowing what you might spend on a PPOR, that is still a LARGE cash deposit

If not, then where who provides deposit bonds and is there much competition between providers?

In the latest (Feb) API Magazine there is a whole article on deposit bonds, who does them, how much they cost and how to get one. It might be worthwhile picking up a copy.