Scenario:
- OTP property due for completion & settlement mid-June
- 10% deposit paid
- Partner & I entered contract both employed with significant income to service loan
- I have since lost my job and partner's income insufficient to service loan as owner-occupier
- However, partner's income is sufficient to service loan as an IP according to online calculators
- LVR will be less than 80%
- Partner is on a fixed term contract at work, expected to go permanent sometime in May
- We have listed the property for sale in the hope of flipping prior to settlement
- If we cannot flip, our intention is to settle and sell ASAP as we cannot afford to hold as owner-occupiers and would prefer cash in the bank rather than tied up in IP
Some of the complications are pretty clear, so onto my questions:
1. Does it matter if my "Person A & Person B" is the Purchaser but the Borrower is Person B? In other words, should I have my name removed from the contract and have only my partner purchase the property? Or is this irrelevant as long as she can service the loan?
2. We haven't spoken to a broker yet, but I'm guessing my partner's contractor status means that it will be nearly impossible for her to get an IP loan approved. Is this correct and/or any solutions?
3. Since our intention is to sell ASAP if we end up settling, are there any loan products that would be suitable to avoid break fees or that allow you to sell with no penalty?
4. Would bridging finance be an option so we could settle and then sell? Would we even be eligible?
5. In the event we cannot finance the purchase and have to walk away from our deposit, what are the possible legal ramifications? I understand the vendor would retain our deposit and interest on our Deposit Guarantee, but what is the likelihood that they'd persue for damages, say chase us for the difference between our purchase price and the resale? (which is very unlikely to be negative, more likely to have profited from our default) The vendor is a large ASX listed developer.
First post at a great forum I've been browsing for a while. Keep up the good work everybody.
- OTP property due for completion & settlement mid-June
- 10% deposit paid
- Partner & I entered contract both employed with significant income to service loan
- I have since lost my job and partner's income insufficient to service loan as owner-occupier
- However, partner's income is sufficient to service loan as an IP according to online calculators
- LVR will be less than 80%
- Partner is on a fixed term contract at work, expected to go permanent sometime in May
- We have listed the property for sale in the hope of flipping prior to settlement
- If we cannot flip, our intention is to settle and sell ASAP as we cannot afford to hold as owner-occupiers and would prefer cash in the bank rather than tied up in IP
Some of the complications are pretty clear, so onto my questions:
1. Does it matter if my "Person A & Person B" is the Purchaser but the Borrower is Person B? In other words, should I have my name removed from the contract and have only my partner purchase the property? Or is this irrelevant as long as she can service the loan?
2. We haven't spoken to a broker yet, but I'm guessing my partner's contractor status means that it will be nearly impossible for her to get an IP loan approved. Is this correct and/or any solutions?
3. Since our intention is to sell ASAP if we end up settling, are there any loan products that would be suitable to avoid break fees or that allow you to sell with no penalty?
4. Would bridging finance be an option so we could settle and then sell? Would we even be eligible?
5. In the event we cannot finance the purchase and have to walk away from our deposit, what are the possible legal ramifications? I understand the vendor would retain our deposit and interest on our Deposit Guarantee, but what is the likelihood that they'd persue for damages, say chase us for the difference between our purchase price and the resale? (which is very unlikely to be negative, more likely to have profited from our default) The vendor is a large ASX listed developer.
First post at a great forum I've been browsing for a while. Keep up the good work everybody.