Off the Plan Finance

[Nemo]

Hi guys/gals

First This forum is really interesting and perfect for reading while watching the IPL. Really interesting reads and very informative....

I'm trying to get the best use of the FHOG, and looking at getting a property that i can convert to IP. here is a bit of the background.

I have 3 IP all in Victoria purchased/built in the last 12 months. (Roxburgh Park 4bed/brand new house - value ~ 360k, loan 324k, net rent $17k pa), (macleod springthorpe 4bed house, value~660k, loan 590k, netrent 23k pa), (1/3rd of point cook 4bed house, value~440k, loan 390k, netrent 16kpa). I have been securing 90% lends with westpac without LMI.

I want to purchase a 2bed off the plan apartment for 400k in inner melb with 18month contract. The problem is i don't have 40k deposit right now that the builder requires. When complete i will get 26k from gov + 6k from builder rebate + i will have cash lets say ~ 50k which will hopfully make it easy to get a loan.

I don't want to actually access any of the equity because well i don't think i can.. they are all at or about 90% and if i do have equity i want to use it for development projects in the next 6 months.. I have enough income for serviceability even in bank terms so thats not an issue.

Any ideas to get the deposit???
The bank won't pre approve because building completion so far away so i'm hoping to get approval for the loan just before completion, will that be a problem??
Any ideas about buying apartments off the plan to access the higher FHOG??


Cheers
Nimesh

 

[handyandy]

Don't understand how you can get FHOG with 3 IP's but not withstanding the answer is to organize a deposit bond. I am surprised that the builder hasn't lined up a organization to provide deposit bonds they certainly have for any of the plans I have looked at.

Basically a deposit bond is like a one time insurance for the builder ensure that a full deposit will be paid when called - be it the purchaser or insurance company. You as the purchaser do your doug and are still liable for the final purchase/full deposit if you fail to complete.

http://www.depositbondaustralia.com.au/web/prod_feature.jsp

 

[josko]

Hi Nemo,

Ask your broker about a Deposit Bond. You will have to ask the Devloper what DP's he excepts.

A Deposit Bond will cost you maybe 2k.

Regards Jo

 

[Propertunity]

Don't understand how you can get FHOG with 3 IP's

As long as you have never lived in any of your IPs, there is no problem getting a FHOG for your PPOR.

 

[Rolf Latham]

Hiya

The biggest challenge with OTP isnt the deposit................in the current changing enviro, its being able to actually settle in 6 to 18 mths time........

ta
rolf

 

[tobe]

For a deposit bond you need a sunset clause from the builder, ie when he will have finished, which a lot wont like to give, and usually a significant equity base. This sometimes needs to be proved with valuations on your exisitng property by the deposit bond complany. Usually the cost of a long term deposit bond approaches the cost of paying bank interest on the 10% deposit over that time anyway.
You could organise a bank guarantee (which is diferent from a deposit bond) if you had a property with less than an 80% LVR, or the same amount of cash in the bank. This cost less than both a deposit guarantee and home loan interest for the amount. The catch is of course the LVR requirement. I have done them where the clients family used their unencumbered property for the bank guarantee....