Twelve months ago Harry signed up for a $500,000 off-the-plan purchase.
A deposit of 10% was all he needed to secure it. At the time his bank was prepared to lend him up to 95% ($475,000). Fast-forward to today his bank, thanks to the Australian Prudential Regulation Authority’s clampdown, is now only prepared to lend him up to 80% of the value.
Harry needs to find more funds due to the short fall or another lender who’s either willing to lend him more or value the property higher. If he can’t do either, he may have to walk away and, potentially, lose his deposit. Harry could also be sued by the developer for any loss it incurs on resale.
We have all heard the horror stories…, there have always been risks associated with buying off the plan and we certainly don’t suggest a 95% lend as being a good idea.
Over the past 11 years, the team here at Property Friends has helped over 315 families dramatically improve their financial position, by building up a significant property asset portfolio and by purchasing Safe Investment Properties off the plan.
We have a very simple benchmark, if a property is not good enough for us, it’s not good enough for you. We believe you need to feel comfortable and live comfortably. Only properties that meet strict Property Friends research requirements for maximised rental return and expected capital growth are offered to you for purchase.
When it comes to getting a loan for an off-the-plan purchase, it’s important to understand that what you receive from your lender is a pre-approval, not an unconditional approval to buy. These are things that are also further explained at your initial strategy session with Property Friends.
During a strategy session with Property Friends you will walk away with $500 value of:
- A detailed strategy specifically for you that is a match
- Your steps to success for building and expanding your property portfolio
- An opportunity to get started right now…
Of course if you’re an opportunist who is cashed up, sit tight, because the next 12 months could see some seriously cheap inner-city apartments go up for sale, which is pretty much the last thing we would suggest for anyone to do, since there is consensus that there will be complete oversupply in the inner city apartment market (!!!), but hey – there are still enough spruikers suggesting it…
I guess one has to make up one’s mind as to who is going to be representing me!