You are about to move into your first home in years.
You have been told that the house has been empty for over two years and you can’t move in, but you can still make a profit by selling your house.
You are not alone in this.
It’s happening all across the country.
“We were living in this house for three years and we sold it in the first three months,” says Joe, a single father who moved into his first home after moving into his wife’s previous one, a two-bedroom apartment in a well-to-do suburb of Brisbane.
He sold it at a loss of $10,000, about $1,000 below the market value of the property.
“I was not even close to making that much profit,” he says.
“It was just a total mess.
The property was totally underfunded.”
“The bank didn’t even give us a notice, they just kept saying it was a long-term lease, but it was nothing like that,” he adds.
Joe says that the banks did not give him a copy of the contract and that they were not informed that he had not signed it.
“I just thought I’d sign the document if I could and if I had a few years left on it,” he said.
So he took out a loan of about $2,000.
After the property went under, he applied for a second mortgage and a third mortgage.
But he was told he would have to pay interest on the first two mortgages, and his third mortgage was set to run for five years.
Despite the lack of information from the banks, Joe says that he was able to make a $2 million profit on his new home by selling it at the end of last year.
In many cases, people do not realise they are buying a house and the bank is only aware of what they can sell for, says Peter Smith, a property market analyst at Capital Economics.
Instead of making a profit, many people think that they will only be making a loss on their property and can make up the difference on mortgage payments.
Smith says that while it is important for banks to keep their records of the house sales and mortgage sales, they should not be so concerned that they can never be sure of the exact amount that was paid or the value of a property.
For example, if a property is worth $100,000 and the banks say it is worth less than $100 million, that means that the bank did not pay the full amount of the mortgage, Smith explains.
As Smith says, banks are not required to keep any records of a sale.
However, Smith says that if a person can prove that the value they paid was less than the house was worth, the bank may be able to recover the difference.
The Financial Services Commission has been investigating the issue and has set up a new website where consumers can contact the Financial Services Commissioner, which is investigating the matter.
According to Smith, if the person proves that they made a loss, the Bank of Ireland will likely recover some of the losses.
This is why it is best to buy a property that is in a good location, that has been built with good land, that is easy to move around, and that you can rent, he says, adding that he would recommend that people do this if they can.
But Smith says the problem is that the government needs to do more to encourage people to be more proactive in finding suitable properties.
It needs to establish better incentives for people to move in with them, he adds, rather than simply handing them a mortgage.
A spokesperson for the Department of Finance said it was in contact with the Banking Commission and that it was working with local banks and property owners to address the issue.
More about Australia, finance, housing, bank, mortgage, finance chief source The Australian Financial Review title Banks tell us how much they want to make from mortgages article Bank of America, Citigroup and Wells Fargo are among the banks that have told The Australian that they are not willing to make any profit from the mortgages they lend to their customers.
A spokeswoman for the Bank said that the company has a long history of offering mortgages at attractive terms and conditions and it was focused on providing a safe, secure and affordable home.
She added that the amount of money that is put in these mortgages is dependent on many factors including the type of property, whether the borrower is working or not and how much it will cost to live in the property and the income level of the borrower.
Read more about mortgage, mortgage rates, mortgages, mortgage company source The ABC’s Nick Coghlan reports from Perth.