Off-the-Plan IP Finance

[YLC]

I want to put an offer for an off-the-plan property. The settlement is in 18-24months. I imagine the finance will be different from your normal established property.
1. How do you usually finance such a purchase? I know I can get a deposit bond for the initial amount. But do I need to get pre-approval from finance co.?
2. What is the best way to finance such a purchase?

Cheers
YLC

 

[The Y-man]

When we bought of the plan, it was difficult to get any lender to commit to a loan. Most told us we would have to wait until a certificate of occupancy was issued to get a valuation.

I am not sure if times have changed, but this was one of the risks you carried with OTP - the valuation at settlement could come in well below the purchase price.

Cheers,

The Y-man

 

[Lia Hayes]

Hi!

the norm with many of our clients buying this type of IP is to get a long term deposit bond, and wait it out.

Obviosuly to get the long term bond, you need conditional approval, and in the case of one of the bigger deposit bond groups, for a long term, they require half of the value of the new purchase to be held in equity in another property.

The property can be sold in the mean time, but at the time of issue this needs to be in place.

Lia