Favourable purchase

Hi there, has anyone had experience with a favourable purchase situation?

Any advice and experiences would be much appreciated

 

Plenty of us have had experience with favourable purchases - what would you like to know specifically?

 

Thanks for replying.

Basically step by step process and is it easy? Has it been a good option, sorry for being very general here

 

You're talking about property right.

 

I am indeed

 

Go on...

 

I understand all the usual lending criteria are relevant but is it easy to use the equity for deposit?

Is it shunned upon by banks?

Is it a good choice in your opinion

 

What are you trying to buy, what do you already have (to squeeze equity out of), what are your larger goals. You kind of need to provide more info here. If it was so easy and the variables didn't matter no one would need a mortgage broker.

 

If it's going to be small investment property pay full freight or you'll end up with a larger than expected CGT upon sale.

 

Buying established house 280000 market value at 350000
Will be first property and to live in

 

Get a good mortgage broker. There's no better way to start.

 

buying from related party?

 

Yes

 

Are you asking whether you can get a 280k loan based on a 350k valuation and claim all the grants and stamp duty exemptions so that you dont have to put money in yourself?

 

I'm hoping to use equity for deposit, I have enough for stamp duty and fees

 

So you want to borrow the full 280k. Is this the seller’s ppor?

 

Yes

 

And yes sellers

 

A favorable purchase starts with the valuation. We order them up front, with specific notes to the valuer about the actual purchase, what we expect the property to be worth & notes about the relationship with the purchaser and vendor.

It is critical that the valuer note that it is a favorable purchase in their report.

Beyond that, it's just a matter of choosing the lender appropriate to the deal. There are a few lenders that do this better than others and a few that won't recognize the actual value at all (some lenders will simply recognize the value on the contract).

You generally will need to show that you have saved at least 5% of the property value and you will need to pay the stamp duties from your own pocket (not equity).

The other gotta is be prepared to pay stamp duty on the actual value, not the purchase price.

Beyond that, it's fairly similar to a regular purchase and finance application.