Short term loan to cover deposit?

[Mal P]

Hi folks,

I have an interesting situation... I have drawn down all the equity I can from my present IPs at the moment, which gives me a reasonable amount of cash towards the deposit on my next IP purchase, but not enough to completely cover it (need an extra $40k).

I have plenty of savings, however I wish to use none of it as of course such funds are not tax deductible. Now, I am currently renovating one of my IPs to add a third bedroom and an extra bathroom plus a general sprucing up. I reckon that reno combined with about six months of appreciation this year will (hopefully) generate enough equity to be able to draw down most of the $40k I need.

Any ideas where I could borrow the $40k for six months? Bank overdraft etc? Any idea of the interest bill? How would I structure it so I can take it after the loan has been approved (so the lender doesn't count it as existing borrowings)?

Thanks!

 

[JoshyBoi]

I've taken out a short term loan to cover the deposit on an IP before - granted it is OTP and i intend to repay the loan fully prior to completion, otherwise the bank would count it against you when seeking the larger loan...so its is possible, depends on your overall situation and whether you can still service the remainder of the loan (from the bank's perspective!)

 

[Propertunity]

Any ideas where I could borrow the $40k for six months? Bank overdraft etc? Any idea of the interest bill?

Visa cash advance and then a 6 month balance transfer at 2.9% > 6.9% on one of those deals that seem to always be on offer.

I can't help you with what you tell the bank though.

When I was doing this, it was the good 'ole days of low/no docs where you did not have to disclose much of anything.

 

[Mal P]

Thank you! The credit card is a good option but the process of going through the credit card approvals etc at the same time as trying to settle a loan might be tricky.

I suppose I can always borrow cash from relatives at commercial rates. Probably a lot easier!

Sincerely,
Mal

 

[w0nnie]

what about a deposit guarantee?

http://www.depositpower.com.au/dpg/

a quick quote gives $480 for the 6 month guarentee

 

[WinstonWolfe]

Visa cash advance and then a 6 month balance transfer at 2.9% > 6.9% on one of those deals that seem to always be on offer.

I enquired about one of those offers from VirginCredit a couple of years ago, and they only allowed a $5k balance transfer.

 

[Propertunity]

I enquired about one of those offers from VirginCredit a couple of years ago, and they only allowed a $5k balance transfer.

It might just be what's on your credit file WW . Or perhaps you already had a Westpac card that you neglected to mention.....Westpac was the back office for Virgin. Or it might have been Virgin's policy at the time

I've done a few $40K - $60K bal transfers for low rates (on renos I was funding) - I think Macq Bank at 6.9% just recently.

I see today that Jetstar Mastercard is offering 0% bal transfers for 6 months.

 

[WinstonWolfe]

It might just be what's on your credit file WW

It was a gold MC with a 50k limit, and 6-7k balance.....and they wouldn't give me a 50k balance.....probably because they were only offering a basic card.