Personal loan deposit

[demoneyez]

Hi all,

Currently I am trying to purchase an off the plan property which requires a 10% deposit (or bank guarantee)

Unfortunately I recently bought another property so I only have 30k in savings when I need approximately 50k.

Once the deposit is paid the development should take between 1 year to 18 months before settlement while it is built.

I was wandering if anybody knew any banks which would be open to letting me have a personal loan of 20k to cover the deposit. i would easily be able to pay it off within 6 months.

I spoke to CBA however they said they had definite rules in place which did not allow personal loans for this type of activity.

 

[Aaron_C]

Why not get a deposit bond?

 

[D.T.]

I've used a personal loan as a deposit, it worked due to the persistence of a good broker to get it through but i wouldnt recommend it.

 

[Kapital]

Hello,
I know of one lender that provides a c/card of $20K which can be used for costs such a stamp duty etc, at home loan rate.

 

[demoneyez]

Unfortunately the developer is not accepting bond for this project. Only bank guarantees and cash deposits.

The personal loan will be well and truly fixed up before settlement.

 

[Kinnon Bell]

Doubt you'll get a personal loan if you disclose the reason of needing the funds.

Draw on equity of the property you bought when you knew you had to cough up the funds for the other purchase?

Or cash advance on a credit card? Or have 2 credit cards, one with a $20k limit and do a balance transfer debiting the $20k card at a low balance transfer rate then have it transferred onto another credit card with a $0 balance which would leave it $20k in credit. Depending on the institution you may be hit with cash advance fees but there may be ways around it.

 

[Rolf Latham]

Unfortunately the developer is not accepting bond for this project. Only bank guarantees and cash deposits.

The personal loan will be well and truly fixed up before settlement.

dumb q, but do you have the funds for the deposit now ?

OTP can be difficult to settle if valuations fall, and obviously if your job or financial circumstances become problematic

ta
rolf

 

[Rolf Latham]

Hello,
I know of one lender that provides a c/card of $20K which can be used for costs such a stamp duty etc, at home loan rate.

Will ABL stump that for an OTP deal ?

ta
rolf

 

[Coconutwheels]

Hi all,

Currently I am trying to purchase an off the plan property which requires a 10% deposit (or bank guarantee)

Unfortunately I recently bought another property so I only have 30k in savings when I need approximately 50k.

Once the deposit is paid the development should take between 1 year to 18 months before settlement while it is built.

I was wandering if anybody knew any banks which would be open to letting me have a personal loan of 20k to cover the deposit. i would easily be able to pay it off within 6 months.

I spoke to CBA however they said they had definite rules in place which did not allow personal loans for this type of activity.

Could you not tell them what they want hear...."there's a new 4D 302" flat screen tv that I must have......or....I just watched the block and now want to do some massive unapproved and unlicensed DIYing" Just kidding of course

 

[demoneyez]

Unfortunately I do not have all the funds now which is why I was wandering if using a personal loan would be feasible to close the gap.

 

[Terry_w]

I guess you know how dangerous this is?

Off the plan valuations often come in lower than purchase price - recently a Melb client 20 to 30% lower than the contract price. This means even large deposit will be needed.

 

[tobe]

Will ABL stump that for an OTP deal ?

ta
rolf

No....not prior to settlement.

What sort of risk profile do you estimate you have? Buying OTP without equity is usually considered at one end of the risk range.

 

[demoneyez]

No....not prior to settlement.

What sort of risk profile do you estimate you have? Buying OTP without equity is usually considered at one end of the risk range.

Not much, similar sized property across the road recently for about 10k cheaper then these are selling for however it was probably 5 or so years old.

With 18 months of growth + il save another 10% it should be enough buffer. Will have a 20% buffer + growth + equity from growth on other property.

 

[Rolf Latham]

Not much, similar sized property across the road recently for about 10k cheaper then these are selling for however it was probably 5 or so years old.

With 18 months of growth + il save another 10% it should be enough buffer. Will have a 20% buffer + growth + equity from growth on other property.

if u were my client, either in our broking business, or in our planning business, id have a serious chat.

Im to usually that vocal, but the hope of growth is not a strategy, and unless you have some other fall back, the risk of doing your deposit AND more isnt small

ta
rolf

 

[Terry_w]

I would have a serious chat as a lawyer too - assume you can't get finance, what would happen?

 

[demoneyez]

I would have a serious chat as a lawyer too - assume you can't get finance, what would happen?

Finance should be ok as I am young, on a good income and can get assistance from family if needed (Guarantor). Worse comes to worse I can go halves on the property with my partner but that is as a last resort. Also pre-approved (not that it means much)

In terms of valuation dropping if the deposit is 50k and I have another 50k as backup I think if the property valuation was over 100k under I would be better off just pulling out and losing my deposit. As to go ahead I would be losing my deposit anyway + another 50k.

Property crash's don't happen much but they do happen and sometimes you need to be in a suitable condition to take the hit if needed. Nobody can predict the future but you can make sure you are in a good place to take the hit of the worst if it does occur.

 

[tobe]

good luck with that.

Note, you are up for more than your deposit BTW. Perhaps you better read the fine print or get your solicitor to.....