Home Loan Advice No Deposit

LNeverPayRetail13 on 22/01/2020 - 17:25
Last edited 22/01/2020 - 17:54 by 1 other user

I don't wish to pay a broker, I'm hoping I can get some good advice here.

I have been renting my place of residence from a family member for many years and I wish to purchase the property from them. I am lucky and will be able to purchase it at a much lower price than market value.

House $650K
Purchase price $250K

From a little research I have done I have wrongly assumed (because of the difference), I would not need a deposit. I'm also assuming no LMI.

For example, I contacted Ubank and inquired about the 20% deposit they advertise. Asking if this would be needed in my example. They came back to me stating it is required, even though the home is worth a lot more than the loan.

In my situation can I:

  1. Get a low rate home loan
  2. Not pay LMI
  3. Not pay a deposit
Financial Home Loan

Comments

  • scrambledeggs on 22/01/2020 - 17:32

    No, no, and no.

    • sweefu on 22/01/2020 - 18:19
      +2

      Totally wrong.

      Why comment on something if you have no idea about it?

  • Seraphin7 on 22/01/2020 - 17:36
    +4

    NeverPayRetail13
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    Awesome.

  • djkelly69 on 22/01/2020 - 17:41
    +2

    FYI you don't pay a broker, the bank does.

  • Tee Rex Arms on 22/01/2020 - 17:49
    +3

    This doesn’t sound dodgy at all…

    • Mechz on 23/01/2020 - 14:33

      Bernie is done with he weekend property and wishes to sell it on, surely nothing dodgy about that… ;)

  • MynyMouqe on 22/01/2020 - 17:58
    +1

    You don't pay a broker - and they will be the best to work something out for you if possible. Contact one!

  • HighAndDry on 22/01/2020 - 17:59

    Get a broker. Make sure you have money for stamp duty.

    • kmwa on 22/01/2020 - 18:09
      +5

      You will have to pay stamp duty on the Market Value of $650K, not the Purchase Price of $250K.

      • HighAndDry on 22/01/2020 - 18:23
        +1

        Yup. Though maybe OP can borrow to pay this too…

  • Jolakot on 22/01/2020 - 18:19
    +1

    Definitely go for a broker, since you're looking for non-standard packages. No loss to you at all, they get paid by the banks.

    It isn't impossible, but you're going to have to jump through a lot of hoops, for example getting a guarantor from your parents.

    • HighAndDry on 22/01/2020 - 18:22

      Not really to the guarantor part, since the LVR is going to be very low. Unless OP also has no income.

  • sweefu on 22/01/2020 - 18:22
    +6

    Broker here.

    First off on home loans most brokers don't charge direct fees, we are paid by the chosen lender for introducing the business.

    The answer to your questions above is all yes, except you may pay stamp duty depending on value of house.

    This is called a favorable purchase. You can generally proceed without LMI, and will be eligible for prime rates. You will need a stat dec confirming the family member is "gifting" you the equity in the property.

    Not all banks will assist.

  • ihbh on 22/01/2020 - 18:56
    +1

    Have you considered vendor financing? That is, the family member seller provides the loan.

    If you don't know how to amortise a loan, then maybe pay them, say, 5% p.a. for, say, 10 years, while saving up the principal and then you pay them the whole principal at the end of the term. You can formally document this in a contract.

    For their troubles, you might offer to increase the principal, say, to $260k, or whatever suits both parties.

    PS: if coming up with funds for the stamp duty is a problem, then consider a rent to buy arrangement, where you defer the purchase to a later date, and also the stamp duty. You need to check the validity of this with the relevant state/territory office of revenue.

  • elgrande on 22/01/2020 - 21:52

    Troll

    • [Deactivated] on 22/01/2020 - 22:15

      Harsh…but probably true.

  • Some Guy on 22/01/2020 - 23:14
    +1

    Your family member would also be paying CGT on the market value. But I'm guessing that you're paying cash and the family member doesn't declare that and also negative gears. I'd like to dob you both in.

  • Porker on 23/01/2020 - 14:54

    Do you have any other assets/properties? I assume no - but looks like you'll be seeking to borrow something like 105% (full purchase price plus stamp duty).

    Some banks my give you this amount, some may not. A number of factors will likely influence your success on borrowing this amount such as; existing assets, income, any other sources of revenue, debt, amount requested vs amount of (new) asset, etc.

    You'll probably need to (bank) shop around or indeed talk to a broker to do the search for you, that is assuming you proceed with the traditional method of purchase.

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