Would banks allow you to do wrap if you have an existing mortgage already?

Hi Amy

Your mortgage documents probably say no you can't do it but then your mortgage documents probably also stipulate that you have to get the lender's permission to rent the property, renovate the property, sell the property, etc, etc.  So you can't but, have literally thousands of properties been sold all over Australia with vendor finance (VF), all with existing mortgages that say they can't be?  Yes they have.

Also, if you go to the retail section of the bank and ask for a loan to buy a property to on-sell with (VF), they quite clearly tell you that's not allowed. However I have friends who've been to the commercial section of the bank and they've been given between $5 million and $7 million to buy properties and on-sell them with VF.

Go figure, the lenders say you can't do it and yet there's a thriving, growing industry doing it.

In relation to the income from our vendor financed properties, we get our direct debit service to label it as "investment property income".  This label has always allowed our lenders to treat the funds as income in our serviceability calculations.

Cheers,  Paul