Selling a home and buying another

Any general questions you might have in regards to loans and finance.
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jacki
Posts: 4
Joined: Mon Dec 14, 2009 3:08 pm

Selling a home and buying another

Post by jacki »

We have a current mortgage on our home for $285,000. The house is worth $350,000

We would like to make an offer on another house of $560,000 conditional to finance.

If our offer, plus a long (90 - 120 day) settlement are accepted, we would put our house on the market in order to raise the funds needed for 5% deposit and stamp duty by settlement.

What are our chances of loan approval in this type of scenario?

We are on one income of $170,000pa
3 Children
$15,000 Credit Cards
$40,000 Car Loan - $381 per fortnight.

Also, what would our chances be if we were to rent out the currently mortgaged property, and increase the mortgage to cover the 5% and stamps? From what I understand, our equity is not enough at this stage.

Thanks,
Jacki

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Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: What are our chances?

Post by Otto Dargan »

Hi Jacki,

Thanks for joining our forum. If you sell the current property then you would likely have an excellent chance of approval. The problem as I see it is that you may not sell your home in the required timeframe, which would leave you short for the new purchase. To reduce your risk I would recommend you do the following:

* Get a valuation completed for your current home.
* Consder a >120 day settlement period, depending on the likely sale time of your current home.
* You may have trouble obtaining a deposit or a deposit bond. You may have to negotiate a lower deposit.
* Be aware that this is a high risk transaction. If anything happens with the sale of your home then you could be in trouble.

As for refinancing your home this would all depend on the valuation. If it valued at $350k then with some lenders you may be able to make this work. I need to know the following:

* Which lender is your current loan with?
* Which lenders do you have credit cards with?
* Which lenders do you have personal loans with?
* Which banks do you have bank accounts with?

This scenario is pushing the boundaries a little so to give you a definite answer I'd have to see your full details. Borrowing 95% nowadays is relatively difficult, although it is still possible.
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

jacki
Posts: 4
Joined: Mon Dec 14, 2009 3:08 pm

Re: What are our chances?

Post by jacki »

Agreed it is a risky one!

Our home loan is with Adelaide Bank. Our cards are Amex Citibank and ANZ - anz is the highest limit. The car loan is Esanda. We have a small personal loan with CBA of $5000

Our everyday banking is with CBA. They wouldn't touch us with a barge pole re; a home loan!

I think we will likely let this one go and look towards selling first.

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Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: What are our chances?

Post by Otto Dargan »

I am surprised about CBA, they can refinance at 95% LVR and can do the purchase at 95%. They will only do this if your history with them (bank accounts, PL payments etc) is absolutely flawless.

Yes the best option is to get a pre-approval for a purchase subject to you selling your current home. If you don't get a pre-approval then you risk selling your home only for the bank to decline your new application and for you to be left renting!

Better safe than sorry.
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

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