Meriton Vendor Finance

Discussion in 'Property Finance' started by hello1234, 31st Dec, 2013.

  1. hello1234

    hello1234 Member

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    Meriton's finance arm offers vendor finance of up to 90% of the purchase price on a 2 year fixed interest only loan - with no valuations, no LMI, no brokerage fees and no early payout penalty fees.

    If we get credit checked by Meriton finance, how would it affect future lender's perception of your borrowing/credit capacity? Will it affect credit scoring? Do you think it looks dirty on your credit file?
     
  2. alexlee

    alexlee Member

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    Shouldn't your bigger concern be whether the valuation even stacks up in 2 years?
     
  3. Peter_Tersteeg

    Peter_Tersteeg Finance broker/strategist

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    The no valuations part is very scary. They can sell you a property, give you the finance, and you're completely at their mercy and quite possibly paying way too much for the property.
     
    Last edited by a moderator: 16th Aug, 2018
  4. Shahin_Afarin

    Shahin_Afarin Finance Broker

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    Also check out the quality of meriton stock. As the saying guys if its too good to be true then?..

    I would order my own private valuation before buying their stock.
     
  5. DaveM

    DaveM KFC Buyers Agent

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    What happens after 2 years? You have to refinance I expect. What happens if at that time Meriton decide to sell off some stock for 50k under market, or people in a similar position decide to sell rather than refi at a loss? You are then 50k in negative equity for your refi.

    Sounds dangerous
     
  6. Mick C

    Mick C Mortgage Broker

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    We carry out Meriton refinance all the time and there are 3 common problems;

    1. Property size, doesn't fit LMI requirements or most lenders requirement...a lot of studio and even some 1 bedroom on offer by Meriton are all under 40-50 sq meters ...you will find a lot of banks will want to see 20-30% deposit/equity before they can refinance.

    2. Valuation falling short...very common-

    3. Leaving it to the last minute and presuming bank will approve a 90% LVR loan
     
  7. Terry_w

    Terry_w Member

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    It will affect you like any other loan. The debt and repayments will be factored in to serviceability if you are applying for finance with another lender for another property for example. There is also the risk of this lender being concerned about you qualifying to refinance the meriton loan within 2 years
     
    Last edited by a moderator: 16th Aug, 2018
  8. hello1234

    hello1234 Member

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    What happens if you can't get finance by the end of the 2-year Meriton Vendor Finance period??
     
  9. Mick C

    Mick C Mortgage Broker

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    THey jack up the rate....commercial rates.
     
    Last edited by a moderator: 16th Aug, 2018
  10. Colin Rice

    Colin Rice Perth Mortgage Broker

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    Sounds like a dangling carrot to get you in then you get whacked with the stick. Sounds ever so familiar.

    Get your own valuation done as previously advised.
     
  11. impala67

    impala67 Member

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    Look at how many brokers responded. Take heed of their advice. Red flags...due diligence.
     
    Last edited by a moderator: 16th Aug, 2018
  12. Aaron_C

    Aaron_C Finance Broker

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    It's as pretty bad idea unless you have no choice.
     
  13. Gremlin

    Gremlin Member

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    If you have no choice, I'd suggest it's a worse idea still...
     
  14. ZachAnSel

    ZachAnSel Member

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    Please avoid meriton vendor finance, my work mate experience huge problems. He bought 40sqm with no val. After 3 years, he refi and get lower val.

    He don't have additional funds to meet lvr, LMI also not applicable. No other choice than to accept higher rates. Even now (5 years later), when he order valuation exactly same as paid price.

    Imagine he lost so much opp during 5 years, higher rates, low rent, and no equity.
    Lucky his salary able to help him over the years
     
  15. delfredo

    delfredo Member

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    How is valuation done on an OTP property? Say the contract was signed 2 years ago and construction is completing in 2-3 months time. As part of the loan application process (if I were to apply today), will the lender's valuer make reference to sale contract prices of other OTP units in the same development, or only make reference to comparable sale of existing properties in that area, or a mix of both?
     
    Last edited: 7th Feb, 2014
  16. Aaron_C

    Aaron_C Finance Broker

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    They will value them as a comparison to other established units in the area, not just in that complex. Basically what you paid for it 2 years ago is irrelevant and it's more like a valuation for a refinance.
     
  17. Terry_w

    Terry_w Member

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    This is not so much a problem with the finance, but the property. However I guess he would never have bought it except for the vendor finance.
     
  18. ZachAnSel

    ZachAnSel Member

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    You right Terry. Start with one problem and lead to another