Blueheelers post has slightly lost me to be honest but:

Whatever you do DO NOT use a Line of Credit on an IP.

There is limited lenders who will offer a 100% offset on a 5 year fixed rate.

I agree with V8ghia with a 20% deposit you will be welcomed by most lenders however do not expect to obtain an attractive rate with a fairly small loan.

A couple of things:

1) If you are after a loan of around $140K i assume that the property is in Regional Australia so just make sure that your Broker checks the post code as although the loan is unlikely to be mortgage insured you do not want any problems post valuation.

2) You are putting in 20% deposit so i assume that the Company has cash reserves or introduced capital. Before you rush in an put your funds down could the Company not look at borrowing 100% plus costs and utilise the cash funds to better use.

3) Remember that this could be the first of many IP purchases you do over the next few years so make sure you that your brokers structures the loan and securities correctly. I spend too much of my time untaggling security messes made by Banks or inexperienced Mortgage Brokers.

Finally 2 of the 4 major Banks have put their interest rates today taking effect from this coming Monday although the Reserve Bank of course left the Cash Rate on hold so consider a Rate Lock or similar. It wouldnt be like a Bank to take advantage of public fear by increasing Rates on a whim and a prayer.  !!!!!!

Hate to discuss agree Jon

61 Qld Finance deals on the go 57 of them went for 21 days finance. PMI / Gemworth taking on average 2/4 days for approval and most lenders out to 4 days for mortgage documents. (The Big 4 now are 4 days on average from approval – documentation with NAB and Anz out to 6 days)

The real estate agency I own has 37 deals currently going through and over 60% are 42 day contracts. 7 of the others are Commercial deals and DD is over a month.

Sometimes i think you have to live in the real world to understand the market.

Must admit i see about a dozen purchase contracts a week and very few of them are 30 day contracts.

In most cases these days the Banks and lenders are so busy finance approval and issue of mortgage documents would not take place in 14 days and 21 days in now the accepted norm.

Normal settlements are moving out to 42 days.

Vinu

You might also want to bear in mind the residency requirments to claim the concessional Qld Stamp Duty as I assume you applied on the basis you were going to be living in the property.

Maybe $5-6K just cant remember with Prime these days.

One of the other considerations with with 100% lending is that the securities accepted are post code restricted.

Assuming the property is in Narrabri your broker will need to check whether the post code is acceptable to the mortgage insurer as well as the lender.

If he is a family member then another altenative is to consider a carry back 2nd mortgage.

The market is so hot in Brissie at the moment I have just purchased an established Real Estate agents office specialising in Development sites. Have appointed a good principal who i have known for years so when settlement days arrives I will post the details so that if any forum members want to contact the office they can do so.

Hi Ranjit

There is no real need to approach a separate Bank to finance each IP but what i would suggest is that you get your broker to structure the loans in a manner i have set out so that that are no crossed.

Unfortunately, SGB are great lovers of X collaralising loans so with them it might be a tough exercise.

Drop me a line if we can be of help.

Just on your broker have you told him that you will be renovating and then selling the house as soon as this has finished.

It is just that his commission he / she receives will be clawed back in its entirity so they may not be keen on doing your next deal for you. If it isnt then it is likely the lender will have a early repayment penalty or deferred establishment fee.

All too often i see clients who have not factored in the full finance costs when trying their hands at renovation.