Rodger and Holy have an owner occupier property they currently live in with their two children. They want to purchase a larger property in the same area, but do not want to sell their property first, in case they do not find what they want; as well their children are in their higher school years so minimum interruption. They also believe they will have no trouble selling their own property. Rodger and Holy are actively looking for properties but are worried if they do find something – how will they purchase?
Hayley and Ron are in a similar position. They are currently living in their own home, but are looking to buy land and build their new home. They would like to stay in their current home until their newly constructed home is ready to move into. They would then place their current house on the market. InShape Home Loans have a solution for both these couples
This loan is perfect if you’ve found your dream home but haven’t sold your existing property yet. There used to be and still are expensive Bridging loans, but now there are home to home loan offers the simple solution of moving into your new home while your old home is still on the market.
Service worked out on end debt or loan you’re going to keep. This lender offers a fully featured home loan with the choice of an attractive ongoing variable rate or an everyday low fixed rate. It is also a good home to home finance option. Features include 100% offset, no ongoing fees, VISA credit card available at home loan interest rates, free redraw through phone or internet banking.
Repayments for a period of up to 12 months are based on what the loan balance is expected to be after your current house is sold (the “end debt”), not the entire loan amount (the “initial debt”).
When calculating the Initial Debt, it is necessary to borrow additional funds that represent 12 months interest (at the current rate) on the difference between the Initial and End debts (the “home to home debt”). This ensures that you can make normal payments on the End Debt throughout the process. Your capacity to service or afford the loan is based on the End Debt.
When determining borrowing requirements, the twelve months of interest required to service the debt to be repaid must have an additional 1.5% added to the current standard variable to ensure any increase in rates would be covered.
Also when determining the splits a 5% allowance is to be made for the sale price of the property being sold not being achieved. Once this has been determined, the End Debt to be used in servicing the loan is known.
|Refinance of existing home||$125,000|
|Purchase of new property||$400,000|
|Allowance for costs||$8,500|
|12 months interest payments*:||$26,192|
|Less net sales proceeds on existing debt||$276,000|
|(“home to home debt”)
You are able to select the loan product of your choice for the End Debt amount, with repayments being principal and interest.
When the initial loan is funded, an amount representing the 12 months interest payments will be deposited into a 100% offset account, to be used for payment of monthly interest until the home to home debt is repaid. If your home is sold in less than 12 months, any remaining amount can be used as you wish.
The home to home Debt loan must be Standard Variable product.
Please feel free to contact Mery-Anne direct on 0418-556-383 or email email@example.com. We will be happy to help you with any questions you may have.
The information does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. The tax or financial planning positions, if described are general statements and is for guidance only. It has not been prepared by a registered tax or financial planning agent/agents. It does not constitute tax or planning advice and is based on current laws and our interpretation. Your individual situation may differ and you should seek independent professional tax or planning advice.