Structuring finance for discounted purchase

[muppet]

or the bank not doing enough due diligence.

[WGN ex-property manager]

The other option is to negotiate a deferred settlement of more than 6 months. This way, the bank may well insist on a new valuation, as the old one is stale and risky.

Ass long as the valuer still puts the property at $1M (even better, get prior access, renovate and get it valued at MORE than $1M), then you go to the bank and borrow the $full $800K purchase price to settle with

CAVEAT: Make sure you can still settle if the value drops!!! Do not make a 100% locked in gamble on the future value of the property unless you have a viable plan B. If you have no other funds to cover any shortfall, then at best you can kiss your deposit goodbye.

[keenbeen]

Thanks Robin. That's some really good advice.

[Rosco]

Hi Robin,

I'm not sure your deferred settlement helps.

The bank will still only lend on the settlement figure.

So if you settle next March and pay $800,000, the bank would only lend 60-90% of the $800,000 paid. You would then have to wait another 6 months after settlement, to look at re-valuing and pulling equity out.

Ross

[roseneath_rat]

or the bank not doing enough due diligence.

Muppet, what do you think is sufficient due diligence for a property mortgage? Should a lender be able to rely on a sale & purchase agreement signed by all parties and facilitated by a real estate agent, assessed and presented by an 'independent' mortgage broker and a valuation from an 'independent' valuer and a payslip from an employer?

If not, how much scrutiny do you want your next mortgage application to be under, and how much do you want the bank fee to be?

Fraud is fraud. This particular case was premeditated and deliberate.