Short Term Loan Selling House

Jackdawson79 on 24/09/2023 - 14:13
Last edited 24/09/2023 - 14:50 by 1 other user

Hi l own my own home outright with no mortgage. l am thinking of selling my house and moving.

Before l sell l would need to spend approximately $30,000 making my house presentable, such as new carpet, painting, etc. What l am interested in is a short term loan of $30,000 maximum one year loan, as l am a pension l was wondering if there's a type of short term loan where l could borrow $30,000 using my home as security and make no repayments or interest until my house is sold and l then repay the loan.

For example, if l borrow $30,000 at 15% interest and l make no repayments and no interest payments until my house is sold a year later and l then repay the bank $34,500 in total, is there such a loan?

Financial Home Loan Loan

Comments

  • Hybroid on 24/09/2023 - 14:21
    +4

    You may be better off knocking $30k off the expected property value and let the future owner arrange their own repairs to their tastes.

    Doubt you'll get such a short term loan for a low interest rate. Most seem to be 3 year commitments so they make more money off you.

    • bobbified on 24/09/2023 - 14:36
      +11

      You may be better off knocking $30k off the expected property value and let the future owner arrange their own repairs to their tastes.

      It doesn't always work that way. Sometimes, you can spend $30K on renovations and make a stackload more on the property sale because so many people make offers based on emotion rather than logic.

      • AustriaBargain on 24/09/2023 - 14:44
        +2

        Yeah I guess even if it does get knocked down, the person who bought it may have to pay 50k extra outbidding people who planned on living in it and knocking it down later when land values go up even more.

      • AngoraFish on 24/09/2023 - 15:07

        Sometimes, but not usually. You'd have to be pretty darn sure before starting renovating that you'd considered all contingencies.

        Unless one is an experienced house flipper it's hard to know the difference between adding value and over capitalising. (hint: unless you're addressing a cosmetic defect with a cheap fix you're probably over-capitalizing.)

        It's also very easy to unearth problems you weren't expecting and end up being sucked into a money pit.

        Sure, paint the walls, clean up the garden and replace a few cheap door knobs with new, but for most people that should be it.

        • AustriaBargain on 24/09/2023 - 15:38
          +1

          Hmmm yes, if you know what it's worth to someone who would want to knock it down, then you could just price it at that in the first place and save yourself 30k and stress. Possibly an REA would be familiar with what the land is worth to someone, minus the knock down costs.

        • dcep on 24/09/2023 - 23:19
          +1

          Unless one is an experienced house flipper …

          Does watching 'The Block' and 'Fixer-Upper' counts ?

    • 2esc on 25/09/2023 - 12:43

      Renovations can back fire if not done well or taste wise. Have you spoken to any real estate agents? Because the area your in and the house you have can also be a factor.

  • AustriaBargain on 24/09/2023 - 14:25

    Are you sure your house wouldn't be destined to be knocked down if you sold it? Look at what is going on in your area, are houses as old as yours being knocked down and nice new houses built there.

  • holdenmg on 24/09/2023 - 14:42

    You can look at a Seniors Loan (usually if over 60) or possibly Bridging Finance.

    Without knowing more such as State or Location or Age, difficult to say more.

  • thatonethere on 24/09/2023 - 15:07
    +2

    You could look at a reverse mortgage - https://moneysmart.gov.au/retirement-income/reverse-mortgage…

  • sam-1966 on 24/09/2023 - 15:36
    +2

    After our father died, my sister and I had to sell his house.

    We took advice from the R/E agent and painted fully inside and had some fairly minor work done.

    She advised to use a handyman for the work and was able to give us numbers. The ones her agency used were retired tradies.

    Full repaint inside (four bedroom house) was a bit of $6,000 including paint. With that, minor repairs (a couple of broken tiles that were highly visible and things like that), garden tidy-up etc we managed to sell on the first day of open house.

    If you have a trusted real estate agent (I know, this is OZB and people will laugh and deride), but it did work for us.

    And we got a LOT more than we expected.

    Reverse mortgage is also a good idea - but keep an eye on the rates.

    Good luck!

  • Jackdawson79 on 24/09/2023 - 16:34

    THanks for your comments, l dont want a reverse mortgage, just a short term one year loan that l pay back once the house is sold

    • garetz on 24/09/2023 - 16:47
      +2

      There is no way you are ever going to get a loan to renovate your place unless there is collateral, otherwise get a personal loan which will charge you excessively for interest.

      • MrHyde on 24/09/2023 - 19:15
        +1

        OP is willing to put the house up as security. So collateral is available.

    • thatonethere on 24/09/2023 - 18:12
      +3

      Bikies. Good luck

    • freefall101 on 24/09/2023 - 19:33
      +6

      A reverse mortgage uses your house as collateral, requires zero repayments and you're required to pay the money back when the house is sold. It's exactly what you're asking for.

      No one is going to give you $30k on the promise you'll sell your house in 12 months. What if you don't? With a reverse mortgage they don't care because it just keeps eating up equity, but a loan they have to go through repossessing your house to get payment.

      Otherwise, line of credit. Interest rates can be good (like citibank, 6.9%, repay at any time) but you'll need to show you can repay $600 a month.

  • MrHyde on 24/09/2023 - 19:14

    You could look into bridging loans - some do offer such loans upto 36 months in period. However, I doubt you'll find anyone that will only charge interest yearly. They will all require monthly repayments of Principal and Interest.

    Only way I can think of is a loan from friends or family. Do put a written contract in place. However, you do risk losing the relationship if things go south and you are not able to repay for any reason.

    • JIMB0 on 24/09/2023 - 21:09

      Can always get a bigger loan and use the extra to make payments. But then again I don't think the banks would give a loan that requires repayments to someone who has no capacity to pay.

    • miwahni on 24/09/2023 - 22:49

      Not necessarily - unsure if things have changed but when I worked at St.George, their bridging loans didn't have repayments on the amount that would be paid out at sale, only on the end debt ie the loan that would continue on after sale. Most users of these loans were people who needed to borrow to finance a new purchase and would have an end debt, but for $30k there won't be a debt at the end. It used to give 6 months to sell the property. Six months' worth of interest would be capitalised to the loan, no repayments to the capitalised loan required.

  • SmiTTy on 24/09/2023 - 20:21

    Where ru going after you sell?
    Wondering if there is a way u can get a bridging loan if you're buying another place and include the 30k (may or may not qualify.. I've never applied for one so don't really know anything about it but just mentioning it as a potential option)

    If u go down this option I guess it means u need to buy first before u can renovate

  • JIMB0 on 24/09/2023 - 21:11
    +1

    This is one of the reasons why you should keep a mortgage on your property. Easy access to vast sums of cash if you ever need it.

    • Gareth on 25/09/2023 - 11:57

      It's so much better for the scammers who you give access to your account too.

  • Mechz on 24/09/2023 - 22:17

    How do you know you'll make enough to cover the 30k loan when you sell? Unless you're just going to rent the rest of your life you'd need to buy another property. What if the price on that place goes up by more than you expected?

    • AustriaBargain on 25/09/2023 - 01:08

      Ehh, if this pensioner is 70, odds are on that the value of a house will cover 30 years rent. Have you seen house prices lately? They are insane and there's no way this bubble is sustainable, especially if half these states follow through with their plans for social housing and new builds.

      • Mechz on 25/09/2023 - 10:25

        Depends, have you seen the rent hikes recently? Everyone has to cover their arse somehow.

  • larndis on 25/09/2023 - 07:47

    Take out a home loan for $40k and use it to cover renovations and repayments?

  • SlickMick on 25/09/2023 - 08:13

    Sorry this isn't helpful to you, but I wouldn't fully pay out a loan. I like having that equity available, and am a bit concerned of not having access to cash when I retire.
    I'd consider refinancing just before I retire to ensure 30 years of contingency.

    • FezMonkey on 26/09/2023 - 16:30
      +2

      I doubt a bank will be willing to restart a 30 year loan term if you're reaching the end of your working years so the refinance may not be an option then

      • SlickMick on 27/09/2023 - 09:41

        Define "reaching the end of your working years". We don't have compulsory retirement - I could work till I'm 90 - at what age do you reckon they should discriminate?
        37 I guess, since anyone older could be retired before paying off the loan??

        A bank couldn't care less. If you can't make the repayments, they'll take the house. They only follow the rules that they have to, and no one is going to force them to discriminate on age.

        They actually have products especially designed for retirees anyway (reverse mortgage).

        I don't see it being a problem.

  • panos on 25/09/2023 - 09:07
    +1

    He is on the PENSION….getting a loan impossible…you need to have the ability to pay it back….

    https://www.domain.com.au/advice/sprucing-up-your-home-befor…

    Number 5 is what you want fix to pay……there must be similiar in your state

    Good Luck

  • Chewy2221 on 25/09/2023 - 09:54
    +1

    Centrelink offers home equity loans to aged pensioners.It might be worth considering. Good luck

  • HardQuiz on 25/09/2023 - 12:48

    Where did the $30k figure come from?

    You may need more (or less), so factor that in your decision.

  • backpaqer on 25/09/2023 - 13:53

    You could check out your local agents, some may have a relationship with a "property stager" who will remove all your stuff and fill the property with up to date furniture etc designed to show off the space to the best of its ability. They can also fix up small things, paint, recarpet etc… then they take their fee from the proceeds of the sale. Though there is probably a nasty clause in there if you decide not to proceed with the sale…they need to get paid of course.

  • backpaqer on 25/09/2023 - 13:54

    or if you want to do it all yourself…you could try a reverse mortgage.

  • sam-1966 on 25/09/2023 - 15:50

    I have just remembered that the R/E agent we used for selling my Dad's house offered a finance package to pay for the advertising - you could also get more to fix the house up. It was paid back through the sale of the property.

    Edit - the package was called 'Realty Assist', this is from their website about this type of service: https://vpacollect.com.au/

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