Offer too good?

[investor2009]

So my broker is offering to personally lend my wife & I $30,000 if our bridging loan doesn't come through. At current variable interest rate. Hows that!?

It's very nice of him, but it's also a little scary..

Basically, we have a loan thats just been approved for 90% of the finance, saved a 10% cash deposit and $30,000 Gov/legal fees are required to close the deal. The same broker did the finance that has now been formally approved and has done all but one of our existing property deals.

 

[Aaron_C]

Wow as a caveat loan or second mortgage? That's cheap

 

[investor2009]

Is this standard practice? I've never heard of caveat loan before and can't really understand why he would do such a thing for us fr a std interest rate apart from being a nice fella and him received commision from the brokerage of the larger loan.

 

[Aaron_C]

Well if he gives it to you on those terms then you should take it. Usually second mortgages charge 12%+

 

[locko24]

Wow! Sign me up!!

 

[investor2009]

Told you we had the best broker
He's always been very good to us. He is also a successful investor and apparently this isn't the first time he's helped out with deposits.

 

[Kristine..]

And this 'best broker' is, of course, a Registered Money Lender?

Never mind the 'lend you personally', he isn't your mate, he is lending you money by way of trade.

Sounds great! but then again, sounding great may not actually be legal and may not actually be appropriate behaviour

Make sure that it is gold which is glistening

Cheers
Kristine

 

[Peter_Tersteeg]

This is very generous. I doubt the broker is doing it through any caveat lending; he probably simply had cash avaialable. Your broker probably likes you a lot, considers you to be good friends and trusts you. This speaks volumes about both you and your broker.

Sometimes it's as simple as helping out a friend when they need it.

 

[Rolf Latham]

Have done it and will continue to do so on the basis of a gentlemans agreement.

We tend to know if a deal will be good or not, more so than most of the lenders

If some form of security is required then you may need to consider how this affects your first mortgage borrowings

ta

rolf

 

[Bigtone]

And this 'best broker' is, of course, a Registered Money Lender?

Never mind the 'lend you personally', he isn't your mate, he is lending you money by way of trade.

Sounds great! but then again, sounding great may not actually be legal and may not actually be appropriate behaviour

Make sure that it is gold which is glistening

Cheers
Kristine

probably not legal, and he probably does not have a money lending license.

however it is a nice thing to do, he is not doing it to for cash (cash probably from his offset account so he will now be paying the same rate) but to save the stress of the client. a bit of customer service goes a long way and investor2009 obviously appreciates it.

as rolf says if he knows the deal and can help out the customer why not?

 

[locko24]

So my broker is offering to personally lend my wife & I $30,000 if our bridging loan doesn't come through.

Perhaps he's just confident in his abilities as a broker, and is willing to put his money where his mouth is!

 

[Ed Barton]

i'd lend this money to family or friends in an eye blink. on a commercial basis i would want above commercial rates.

 

[StuartW]

A healthy level of scepticism is good but don’t rule out an honest person trying to help. I have also done this quite a few times but only for clients I trust (of course) and I have a one-pager signed off to put some terms around it (but I’m sure it wouldn’t be a robust legal agreement).

 

[Marty McDonald]

I have thought about doing it a few times but always resisted just in case things went pear shaped / due to the legal issues. In a bridging type scenario with a client that I considered a friend I would consider it if I could get some form of security / knew it was a safe deal.

I don't think the broker is being dodgy, if he was it wouldn't be a home loan rates. Second mortgages are more like 20% pa from my experience. Caveat lends at even higher rates. Ace if you have some contacts for seconds at 12% pa please pm me.