I have not ever taken out a loan before for an investment property or a primary place of residence so I have a few questions.
Firstly, do I need equity in another home to borrow to by an investment property?
Do the properties that I use the loan for work as collateral for the investment loan?
If this is the case, is there a limit to the amount that I can borrow?
If so, does this limit carry over from lender to lender?
Is it possible to get 100% finance on numerous properties without having my own home as collateral?
I realize this would open me up to interest rate risk, but could someone suggest a list of lenders that provide 100% finance?
Also could someone please give me an idea about the criteria set for applying for these loans?
To be more direct I have a plan that I was thinking of applying but I don’t know if it is even remotely possible:
Say a home is owned and is sold for $120,000. Then this money is used to fund the closing costs only, of several positively geared investment properties. Each property should be returning at least 20% per year and each property is bought with no deposit down and 100%.
Is this possible?Please rectify any misconceptions I may have, such criticisms are would prove highly valuable to me.
Finally does my income limit my borrowing capacity and to what extent?
Thanks heaps.
Regards,
ChrisHi Chris
You will need a deposit to purchase a property, this property is then held as security over the loan,
Some lenders do have 100% finance products, However, your serviceability area of intended purchase etc will be a deciding factor in qualifying for a 100% lend,
You may have heard of other investors who mention no money in the deal, this is somtimes achieved by pulling equity from an existing property to use as deposit and costs on a new investment,
I would suggest you speak to an independent Mortgage Broker as each individual circumstance is different and requires a different approach to gaining finance.
Regards
StevenMortgage Broker
[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
VictoriaPLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
Chris,
I forgot to mention, if you are entitled to the FHOG you may be able to use it to fund costs on a 100% lend.
Regards
StevenMortgage Broker
[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
VictoriaPLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
Further to what Steven wrote above, there are a few 100% loans avaialble, but these are not ideal products. They are very hard to qualify for – ie more stringent requirements. The Lenders Mortgage Insurance is about 2.6% of the loan amount (on one product at least), and the types of property that they can be used on is fairly restricted (ie no country proeprties). And at least one product is only available for owner occupiers.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi
I have three loans for investment properties.
I used equity in my own home to fund this.
I also had 100% purchase price PLUS costs, eg solicitors, pest and building reports, stamp duty etc.However, be warned, your circumstances must be considered, not just serviceability, but other things too.
I went through a bank.
I don’t necessarily advocate using your home as equity, incase you go down, your home might go too.My own situation is vastly different from yours. Consider all options including interest only loans to get you started.
I found the first home to be the hardest to get a loan for (maybe the female myth still exists?) despite a good financial position and I don’t mean wages.
After that the next three were easy.
cheers
Elves
Sounds like your cross securitised.
Any lender will be able to lend you more than 100%+ of the purchase price if you are using two or more properties. I htink Young Investor was referring to 100% finance based on the one security.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I think I answered some of the questions-
as I said I used the equity in my own home and I dont necessarily advocate this
and it does depend on the bank or broker you go to as to what they will lend, and yes it is possible to get 100% finance, they are out there.
cheers
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