[Question] Surety to buy a property

[Nickolai Naydenov]

Hi guys, I want to buy a a specific property, however the bank won't loan me money because I have 4 properties already and they are not looking at what I'm paying them back, they are not interested in the fact that I get rent and so forth. So bottom line is I want this property and I can get someone to sign surety for that specific property, I would like to know can that be done, what is the procedure and how long does it take?
Also any tips on buying a property on auction? I have been to different auctions many times but never to a property auction. I'm aware that I have to pay the outstanding levies on the property, the company that does that auction charges commission to the seller only, any other tips, hidden costs or anything you can think of will be much appreciated.
Thanking you in advance

[Doug B]

Hi Nick, I'm from Remax, I do not have clear and concise answers to your questions but give me a couple of days, say by Wednesday next week and I should be able to shed some clear light on your questions. The part about the bank is especially interesting and I will definitely give it suitable attention.

[Dave A]

How many banks have you tried? If all the finance is with one bank so far, they might be feeling over-exposed - particularly if the fiance is heavily leveraged.

[Doug B]

Hi Nick, with the introduction of the National Credit Act the amount of money the banks are prepared to loan you is know as PTI (Pay To Income). Today, unlike a few years ago, the amount they are prepared to lend is based on your nett disposable income as opposed to your gross income in days gone by. It would appear your PTI is maxed out. You can get someone to sign surety but then bear in mind this will affect their ability to borrow money from the bank as it will affect their PTI which will decrease adversely affect the amount they are able to borrow. Second point on surety is that it is a dangerous practice for the person who is prepared to sign the surety as they share 100% responsibility as do you, should you falter they carry the cart! Hope this helps a bit even though it might not be exactly what you want to hear.

Regarding auctions, I am no expert but I do know having had the experience of having had a block of flats auctioned by Auction Alliance, that the purchaser is liable for a 10% deposit at the fall of the hammer. On top of this you still have to pay the full auction price, so pretty heavy stuff. Hope this helps, please don't hesitate to ask more questions