Does anyone know if there is a way around the limit by banks of only granting an 80% loan for areas such as Pyrmont, NSW. Reason being that such areas are high density. So?
You will probably find that the banks won’t lend over 80% because the property is in a undesirable location as far as the mortgage insurers are concerned. So therefore 80% is the highest he lenders will go.
Financial Wellbeing Coach
W: http://www.pfsfinance.com.au
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E:[email protected]Development Finance Specialist
Why is this so? Other major cities in the world regard inner city locations in a very favourqable light. How is it that in Sydney, Pyrmont and the CBD are considered bad risks for banks?
Hi Salla,
The problem may not lie with the banks. When you go over the 80% mark then the lenders mortgage insurance company will (basicall) re-evaluate the loan in light of the risk to them. If they consider they are overexposed they will say ‘no’ – which means the bank cannot cover itself – so they now say ‘no’
There are a whole range of triggers that can create a ‘no’ answer. Not the least of which is how much exposure does the LMI have to the area. Other reasons can include size of the apartment, valuation coming in, your situation and so on.
Derek
[email protected]Property investment advice and researched property in quality locations available.
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