Banks not giving loan for student apartment

smith1286 on 01/03/2019 - 10:16

Hi All,

I am looking for your expert advice on my current situation.

I inspected an Student Apartment last weekend and made an offer ( Deposited $1000).
The agent accepted our offer and then we contacted banks for loan. When we contacted banks we came to know that no bank gives loan for student apartment.
Now we are stuck as settlement date is quiet close . We spoke to real state agent and he said you should have done this research earlier before making offer.
If you void contract of sale now you have to face the consequences.

I am wondering if anyone can advice me what shall I do now. Also, If i void contract now how much maximum patently I have to pay.

Thanks,
Smith

Financial

Comments

  • Neoika on 02/03/2019 - 14:19
    +2

    OP will buy a property in a retirement village next time.

  • Godric on 02/03/2019 - 15:44

    You're a student, count this as a lesson learnt.

  • meowbert on 02/03/2019 - 16:59

    Go to a broker asap, there are some pretty loose but vaugely reputable lenders out there. Make sure you're very comfortable with the replayments.

  • VerticallyIntegrated on 02/03/2019 - 18:11
    +6

    Can you MS Paint the contract and upload?

    Have you thought of bikies to solve your problem?

    Any high yield investments you can hock at Crime Converters?

    Consider swapping this studio for the penthouse at Opal?

  • Chumpmaster on 02/03/2019 - 23:30
    +4

    Speak to a small business banker, have them class the property as a commercial security (as its not classed as acceptable residential security) and chip in 30% cash equity, or equity from your own home. Get a commercial loan for 15 years p&i. Rates would be pretty steep compared to a home loan but it's another avenue no one here has mentioned.

    • omguleh on 04/03/2019 - 12:49
      +1

      At 30% it would be a 10 year loan. And regardless of how you negotiate they use a benchmark interest rate to calculate serviceability (anz uses 7.5%). They also don't factor in rental income.

      • Chumpmaster on 05/03/2019 - 10:53

        Depends, vacancy rate for student apartments are relatively low, argument could be made that it's unlike other commercial properties and factor in the rental income minus expenses. At least at this point for OP any avenue other than losing his deposit + other cost is worth a shot.

  • modgod on 02/03/2019 - 23:40

    Sorry for being ignorant but what will happened next if he can’t get a loan?
    I got a pre approval before buying my land/house but never saw the other side of this

    • Milk tea on 03/03/2019 - 01:56

      I think that if it's unconditional then the buyer will be subject to paying compensation costs to the seller such as the sellers legal fees and conveyancing fees, building valuation etc whereas subject to finance he may just lose the deposit.

    • Name on 03/03/2019 - 02:01
      +2

      Not much will happen if he was smart enough to have inserted a finance clause into the contract like any sensible person would do. So far I'm unsure what he has done.

      Although even if he did insert finance clause he'd still have to prove that he put reasonable effort into trying to gain approval. Which would require proof he went to more than one bank.

      He should speak to a mortgage broker asap.

      His contract would state whether he'd be up for 10/20% of the offer value. It's possible the property owner will sue him for the balance.

  • spoonman169 on 03/03/2019 - 06:50
    -2

    And it starts, the millennium babies have hit the market and its time for my generation to make money from stupid mistakes. Why in the world would anybody hand over cash without pre approval from at least one bank ??? I may not be a smart man but i wouldn't hand over money for a product unless i knew i could pay for the entire price of the product ?? I am sorry but this is just foolish. Your "friend" needs a uppercut.

    • OG Puppy Banana on 03/03/2019 - 09:46
      +1

      You can you know that OP is a millennial?

      I'd be cautious in branding millennials as stupid financial decision makers.

      The are the generation that have had access to an age of (almost) complete information regarding their goods and services, thus building a culture of scrutiny prior to purchase.

      They are also the most over-educated generation (which I can concede can be taken with a grain of salt), though research has shown the highest willingness to leave their birth state and country to advance their bottom line.

      Yes, there will be dummies in all generations, but I don't think millennials are by any stretch stupid.

    • [Deactivated] on 04/03/2019 - 12:53

      Your generation? X or millennial, you'd be making money off others already if you were clever enough to do so.

  • bonezAU on 03/03/2019 - 07:00
    +1

    wtf is a student apartment to begin with? can someone please enlighten me on this topic?

  • [Deactivated] on 03/03/2019 - 07:31
    +1

    OP you wanted to screw students with shitty accommodation, but now royal commission and banks screwed ya

  • gimme on 03/03/2019 - 10:14

    I'll lend you the money. With the level of due diligence you have shown I can double my money in a year and foreclose on the property in a couple. Just drawing up an agreement now. I'll send you the last page to sign

  • greatlamp on 03/03/2019 - 10:27

    I would have thought you could get a loan, but not borrowing 90%

    Maybe you can get a loan of 70% and get 20k for the deposit somewhere else

    I wouldn't be recommending a student apartment personally, it doesn't have any of the benefits of owning real estate

  • HeWhoKnows on 03/03/2019 - 15:11

    If sale contract has been signed then its much more than $1000 at stake.
    Op's friend would be liable for the full 10% deposit normally required on property sales and could be liable for any loss suffered by the vendor in reselling the property.

  • dudeguy on 03/03/2019 - 15:40
    -2

    Wow: one thread, so many crappy comments.

  • echelon6 on 03/03/2019 - 19:52
    +2

    I'd say you're quiet screwed.

  • joannatan on 03/03/2019 - 21:30
    -1

    anything less than 50sqm, bank don't give the loan, some special exception talk with bank lender, if you put deposit more than 50% deposit.

  • whoopdeedoo on 03/03/2019 - 23:27

    CBA doesnt really have a internal size requirement. check them out first.

  • djones145 on 04/03/2019 - 09:21

    hahahhahahhahhaahahhahaha
    hahahhahhahhaahhhaahahhahah
    hahahhahhaa
    you should complain to the royal commission
    or today tonight or ACA
    banks being un reasonable and not lending to you

  • SlickMick on 04/03/2019 - 22:56
    +1

    Just in case somebody is genuinely looking to borrow for student accommodation, we hit the same snag (except our contract was subject to finance, so we could have got out of it, but we didn't want to - we wanted the apartment)…

    MECU will loan for student accommodation. We've never refinanced because don't know who else we could go to.

    • smith1286 on 04/03/2019 - 23:55

      Sorry to ask this but what is MECU ??

      • SlickMick on 05/03/2019 - 00:09
        +1

        Oh sorry, they changed thier name to bank Australia

        • smith1286 on 05/03/2019 - 00:10

          Thanks for your reply.

  • smith1286 on 05/03/2019 - 00:09
    +1

    Thanks everyone

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