Hi Folks,
Have done a search and couldn't find the answer so hoping somebody can help.
Property details:
Original purchase price by investor is $50K.
The first mortgage is $40K.
The marked-up price to the end buyer is $60K.
5 years later the market value is $80K.
How does the end buyer get finance to buyout the investor without a 20%+ deposit? Where does the deposit come from?
With normal purchases the buyer will get a loan approval once they have established that they have enough funds to cover the deposit. Having secured the loan they proceed with the purchase. With a wrap, how does this work?
Loans are not assumable in Australia so the first mortgage can only be paid out by funds from the sale of the property. The sale cannot be to the end buyer because they cannot get other finance without a deposit. So how is it done?
Is there some deal stiched up in advance with the lender who agrees to refinance the property at market value to give the end-buyer a first mortgage of $40K as well as an equity loan of $10K to cashout the investor?
Will the first mortgage lender agree to do this whether the sale is by instalment contract or lease option?
Thanks in advance.
Mike
Have done a search and couldn't find the answer so hoping somebody can help.
Property details:
Original purchase price by investor is $50K.
The first mortgage is $40K.
The marked-up price to the end buyer is $60K.
5 years later the market value is $80K.
How does the end buyer get finance to buyout the investor without a 20%+ deposit? Where does the deposit come from?
With normal purchases the buyer will get a loan approval once they have established that they have enough funds to cover the deposit. Having secured the loan they proceed with the purchase. With a wrap, how does this work?
Loans are not assumable in Australia so the first mortgage can only be paid out by funds from the sale of the property. The sale cannot be to the end buyer because they cannot get other finance without a deposit. So how is it done?
Is there some deal stiched up in advance with the lender who agrees to refinance the property at market value to give the end-buyer a first mortgage of $40K as well as an equity loan of $10K to cashout the investor?
Will the first mortgage lender agree to do this whether the sale is by instalment contract or lease option?
Thanks in advance.
Mike