Some lenders will require a deposit of as little as five per cent of the purchase price. Of course, there is a catch.
Cross collateralisation is the process whereby a loan or loans are secured by multiple properties you own.To explain further, your collateral is what you offer the lender as security when applying for a home loan.
If so, this purchase method can test the nerves of even the most experienced of property buyers. The uncertainty of the final price, coupled with your financial position (normally finite!) and emotions on the day, makes your heart beat pretty fast! It’s also not something you do everyday, so the unfamiliar process can cause more angst than normal.
Without capacity to repay the loan nothing else matters. This ‘C’, is all about proving to the lender that you can comfortably make the repayments based on your current income and expenses. You need to prove to the lender that you have, and will continue to have, the financial capacity to service the debt without hardship.
One of two scenarios may have occurred for you to be in this position. Your house is for sale however you haven’t managed to sell before finding your next dream home; or sometimes it just hits you out of the blue – you take a new route home, you browse through a free magazine in a café, or you’re at a friend’s place and spy it out the corner of your eye – you’ve found a home that must be yours!
118/202 Jells Rd, Wheelers Hill VIC 3150
