No Deposit - Strategy (For Rolf)

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From: Firefrog .


Rolf - I note on your web site you mention a strategy that may allow purchase with no deposit can you explain this.
 
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Reply: 1
From: Rolf Latham


Hi Firefrog

I do sincerely hope this is your nom de plume, otherwise your mum might have some explaining to do ?

No of strategies:

1. Valuation over contract, providing you can buy really well, like at 79.5 of market or less, most lenders will take val over contract price. Any hint of mortgage insurnac and this is obviously out the door, since LMI people will take val or contract whichever is the lower.

2. We are all aware we cn use equity from our home to "transfer" to IP

3. Recent product addition to the stable also provide for those on "high" incomes, for 90 % loans without proof of 5 % savings over 6 months - as most LMI people will insist. The 10 % can be gifted, borrowed, or obtained in whatever way.


Depending on individual circumstances, there is commonly a way.

Ta

Rolf
 
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Reply: 1.1
From: Jude H


Rolf,

Is there such a thing as a loan whereby you can use the property you are purchasing as the only collateral?
Property I bought this week had enough equity to be used against itself and that is allowing for the 20% ie would not need mortgage insurance.
My broker says no can do. Yet I am sure it was either sim' or GC who said in an earlier post that this is the way they prefer to finance their properties. Confused, can you please help?
Thanks
Jude
 
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Sim

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Reply: 1.1.1
From: Sim' Hampel


Hi Jude,

If you have a 20% deposit and no more than 80% LVR on all your other properties, then in theory, you should have no problems getting a loan for the new property without any cross-collateralisation.

ie. the new loan would stand alone... bank supplies 80%, you supply the other 20%. Existing properties have nothing to do with it.

If you are dealing with less deposit, or higher overall LVRs then you'd better talk a mortgage broker (or get a second opinion if you already talked to one and got no joy !), as the banks may start to get twitchy... but there are things that can be done ! Don't let anyone tell you "can't" !!

Rolf ?

 
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Reply: 1.1.1.1
From: Rolf Latham


Hi all

Yes I agree. Quick post only more info later.

My experience is that as long as you can keep the Mortgage Insurers out of it, most lenders (not all !!) will look at these deals on a case by case basis.

Where LMI is involved the general rule (exceptions do occur)is that the insurer will take val or contract whichever is the lower.

Usually,there is very little that can not be done, as long as there is a good business case. Just depends on the persistence of your broker. A few things though are really out there.
Ta

Rolf
 
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Reply: 1.1.1.1.1
From: Joe Ali


Hi Rolf ,

I recently brought three properties up north of Adelaide for around $45'000 with a 5% deposit on each. They all needed an approval from the mortgage insurance agent. What I was wondering was may I still borrow against these properties in order to purchase more without any money down?
 
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Reply: 1.1.1.1.1.1
From: Rolf Latham


Hi Ali

The Mortgage Insurers would say no.

However if you can find a place that you can buy for 40 and you know it would reaonably value up at 51 000, AND you had $ for legals and Stamp Duty, then you would most likely have a deal. Assuming of course that all else stacks up.

Ta

Rolf
 
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Anonymous

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Reply: 1.1.1.1.1.1.1
From: Anonymous


This may be late, but I have only just joined the forum.
Depending on who you purchase from, you may be able to show a higher purchase price on the contract, with a clause or seperate agreement that gives you a rebate for early setlement. For example, you purchase for $180,000, but the contract shows $200,000 with a rebate of $20,000 for early settlement. This $20,000 acts as 10% deposit whilst there is no money down.
 
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Anonymous

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Reply: 1.1.1.1.1.1.2
From: Anonymous


This may be late, but I have only just joined the forum.
Depending on who you purchase from, you may be able to show a higher purchase price on the contract, with a clause or separate agreement that gives you a rebate for early settlement. For example, you purchase for $180,000, but the contract shows $200,000 with a rebate of $20,000 for early settlement. This $20,000 acts as 10% deposit whilst there is no money down.
According to the bank you have 10% equity, yet you borrow 100%
 
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Sim

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Reply: 1.1.1.1.1.1.2.1
From: Sim' Hampel


You could do this, but you are deceiveing the bank in your actions and this could have serious ramifications.

Proceed with caution.

 
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Reply: 1.2
From: Nikhil Mohan


Hi All,

But what if the Loan issue is not the hard part but securing the property is!
For example: Professionals that qualify for the 90% loan but have no Equity to secure the property.

I recently had to move heaven and earth to secure a development because it is getting harder and harder to secure property via Deposit Bonds and Bank Guarantees.

Any suggestions / tips on how to secure my next property without having to wait for settlement and refinancing options?
 
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Reply: 2
From: Rolf Latham


Hi FF

Frank Shead, who posts on this site is a High Lend Specialist who arranges loans for high income earners where you can even borrow the costs IF you qualify for the package.

I can highly recommend Frank for his type of work, and also those people that have had a bit of bad luck with their credit history. While I have done these myself in the past through GE, Liberty, Pepper, Bluestone etc. I have found we cant be all things to all people.

Our strategy works similarly but in a slightly different way. Tonto Home Loans as an example will provide you with 90 % finance even where the 10 % is borrowed from whatever source, as long as the 10 % is declared and you can service everything.

Ta

Rolf
 
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