Loan Structure for Unit block IP

What would make me ineligible for the FHOG?

I've been looking at between 3 and 4 unit blocks.

The majority of blocks i've been looking at aren't strata titled and as such, they all come under the one title which is where i see the complications beginning to start . . .

Shaihin – In QLD

Richard – Thanks for the welcome and your reply. Thats good news about the FHOG from what your saying about your clients experience. Are you able to provide a little more insight on how you recommend structuring the loan/s for this type of strategy. What did you client do in his/her case?

Terry – Yes, from all the info i've read on the FHOG i believe i would still meet the criteria under my plan although i was keen for advice from some professionals on here or others that may have already implemented the same strategy as the one i'm planning.

Thanks for the advice.

Any ideas on how i might go about structuring the loan/s for this type of plan?

I don’t have a specific property in mind for purchase just yet and therefore I can’t provide any exact details. From what I’ve been looking at though, I will be able to cover anywhere from a 12-15% deposit with the savings I have currently.

Will the fact that I plan to continue renting out the remaining units aid in my quest for finance as I will be earning rental income which will help with repayments. Or will the fact that I may not be able to get a standard type of residential mortgage negate the perceived benefit of the rental income?

Richard – thanks for your reply. What do you mean by ‘credit scored’ as opposed to what? Not credit scored? I’m sorry but I don’t understand these terms.

Also, I will be able to come up with a minimum of 10% deposit although I am wondering If you recommend only coming in with the minimum of 10% or putting down more? I could, but i wonder if I’m better off keeping the extra $$ for capital improvements as the blocks I’m looking at are definitely renos.

Sorry, another question, if I can come up with a 10% deposit on the amount I want to borrow to finance the property and the loan amount is within my borrowing capacity will the banks valuation of the property still affect the approval of the loan if say the property costs between 5-15% more than the valuation? I’m still trying to understand how lenders might consider my plan.

Cheers

Shahin – is this just in my case because of my plan and only with certain lenders or have the majority of lenders further tightened their lending criteria?

Also, how come the number of units on the title has such an impact on financing?

Thanks for your replies guys. I’m more than a little confused now though as I have two brokers telling me two different things. Richard is saying it shouldn’t be a problem getting a residential loan on anything up to 4 units on the one title and Shahin are you actually saying that I will more than likely need a commercial loan, is this right? I wouldn’t think I would have any chance getting a commercial application through based on my deposit and also because of the properties I’m looking at.