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Murwillumbah NSW - Pay 75% of purchase price now and 25% when you sell

Discussion in 'Where to Buy' started by Tim & Chrissy, 20th Dec, 2015.

  1. Tim & Chrissy

    Tim & Chrissy Well-Known Member

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    There a lots of terms and conditions attached to this however you only pay 75% of your mortgage costs upfront and pay the remaining 25% when you sell - no set time period or limit.

    I can't help but feel this offer will all end in tears down the track and possibly bankruptcy:

    How to get a discount home loan


    Kyle Topp and Christina Stig, both 23, will get the keys to their brand new pad in Murwillumbah, NSW, in February. Once they begin mortgage repayments, the pair will only chip away at 75 per cent of their house-and-and package’s purchase price....

    ...“It made a really big difference to the size of the deposit we could put down and it means we could bump up the amount of bedrooms and change other things,” he said.

    “But most of all it meant smaller payments for us. And one day when we sell we know we’ll be OK to pay the 25 per cent because our home has already gone up in value,” he said.

    ...“Well, I guess the catch is we’re a charity. Our aim is to help people into housing, but we will be expecting our money back at some point,” he said.

    Mr Cubit said the company was working off the principle that Australians stayed in a home for an average of 10 years.

    “We’ve got no set timeline, we’ve just done the numbers and I guess we’ve just taken that gamble,” he said.

    ...The deferred 25 per cent of the home loan will be covered by Horizon Housing, payable when the owners sell the property, and it does not accrue interest or any charges.

    This is the income criteria for the Horizon Housing Innovative Mortgage Scheme:

    ● One adult — $59,111

    ● Two adults — $81,722

    ● Three adults — $104,333

    ● Sole parent with 1 child — $81,779

    ● Sole parent with 2 children — $101,385

    ● Sole parent with 3 children — $120,991

    ● Couple with 1 child — $101,329

    ● Couple with 2 children — $120,934

    ● Couple with 3 children — $140,541
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

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    Just another hook. These guys would struggle for a deposit and repayments but with a 25% are looking to extend themselves to the maximum again.

    No one is considering risk - what if they sell at a loss? This is magnified by the fact that they've got a 25% discount and need to pay the full amount. Murwillumbah is a country town with its own inherent risks.
     
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  3. willair

    willair Well-Known Member Premium Member

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    The one item with Murwillumbah it floods big time in the lower areas,it was a small country town not now,i go through it a far bit at it took them 20 years to get McDonalds and that over a klm from the business area out from town on the river,also Aldi,set up from just down the road
    i think you would want to do your homework..imho..

    Drug Bust

    Landlords copping $100,000 bills when drugmakers move in
     
    Last edited: 20th Dec, 2015
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  4. Tim & Chrissy

    Tim & Chrissy Well-Known Member

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    Also what's is it for the developer? Is it guaranteed sales or are they inflating their H & L prices to eat into that 25%
     
  5. Sonamic

    Sonamic Well-Known Member

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    What if they never sell?

    Things change. They may discover Property Chat tomorrow and decide to Equity up into the next property again and again. The developer is left holding 25% of the bag.
     
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  6. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Possibly inflated prices and/or some sort of shared equity scheme where the purchaser is assigning 25% of any future sale price to the developer.

    This will raise all sorts of legal issues.
     
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  7. Tim & Chrissy

    Tim & Chrissy Well-Known Member

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    The problem is it's a charity funding the 25%. If they don't sell in that 10 year period the charity is gambling on what happens? Does the charity go belly up? Does the 25% become immediately payable?

    It just seems like a disaster waiting to happen. Like the couple in this article, they talk about having a smaller payment but also adding more bedrooms due to the 25% discount.
     
    Last edited: 20th Dec, 2015