Ok, So I have applied for another loan to get my next investment property, the assessor has some issues with servicability…
there are 2 reasons, 1 which i would like some opinions on (if i could riddle it with expletives then i would)
Assessor says: They will only consider $210 a week on my property 4 because the valuer has decided this to be market rent for the property even though they are fully aware the property is tenanted at $300 a week…..
(insert expletives here)
Has this so called valuer made some calls to this regional town in NSW and asked some property managers how much it would cost to rent a 3 bedroom 2 bathrom 1 car garage fully renovated property and if there are any available??????
They will get told, Um… No. And if one does come available, you will pay $300 a week and they are gone in a few days…How long does it take valuers to catch up with current market conditions? The rental market in parkes has gone through the roof in the last 6 months due to mine expansions and a severe lack of rental properties…
I have already had HUGE dramas with the reval of this property last month, see my previous posts…
What data are they looking at? last years????
I am under the impression that when you purchase or pay for something, the PRICE YOU PAY MAKES IT MARKET PRICE!!!!!
this is what i was always taught!
So frustrated…
Hi Goldies
Yes i can understand your frustration with lenders serviceability as we receive similar emails from clients every day of the week who have been refused borrowings by their own Banks / broker.
Unfortunately without knowing all of the facts it is difficult to assess the deal but all i would say there are many ways to assess a deal and some lenders simply are not set out to assist investors whilst others are familar with some of the structures we use and the difference in borrowing capacity can be quite substantial between lenders.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
my main issue is how they can decide to assess the rental income at $210 and not the $300 we are actually getting citing the reason of '$210 is market rent' this is why i am so annoyed.
how can it be market rent if we are getting $300 a week???
Hate to say as i said happens every day of the week with some lenders.
Many of the bigger lenders take their valuers assessment over the Lease agreement.
Course there are many that dont.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
this is the first time I have used a 'specialist investment broker' and we've had so many issues. I went straight to CBA the last 3 times and not a worry in the world. Just seems so strange to me. I cant work it all out
The valuer has to be boring, traditionalist, accurate and factual. Its what he does .. and if they cant rely on him .. they just wont use him. So he doesnt make his numbers from the air.
He takes his look at your current property .. matches it with other equivalents in the area and matches it based on a reasonably conservative outlook and overall assessment of the market state.
Your property fetching $300 is not the market in its own right. Its ONE of the items on the market. And if you have a situation where the market has moved quickly in the area .. you may find the valuer will stick with older equivalents for trying to pass the deal. To properly assess the market in Parkes .. he must look at an overview of similar properties and what the most recent rental achievement has been. Working through or for a finance broker or bank … he will probably put a conservative estimate based on the median market conditions.
Be assured .. the price you pay or get VALIDATES market conditions .. and if consistant with other prices in the area it will influence the accepted market value. But as a single price .. its not the market itself. It remains the market for that individual property, or group of properties.
Sounds like your with ANZ….
Simple answer- They are the one lending you the money; so you just have to play by their “rules”
Solution- if you still can’t meet serviceability you will have jump ship ( make sure you go to a lender that WILL accept your $300 per week lol)
OR close off your credit cards and see if you pass the serviceability.Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Hi Goldies
I understand the frustration – we deal with this type of bank craziness all the time.
I recently wrote a blog entry on how investors can improve their borrowing capacity. Do any of these work for you?Article here
If it is ANZ, the good news is that there are quite a few lenders out there with more generous ways of assessing your borrowing capacity. Your broker will need to choose carfefully though – you only get so many cracks at it.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
So turns out CBA's lending policy no longer suits me as an investor. Had discussions with Broker and we have a plan to get this purchase through and then we will head elsewhere to another bank who takes into account 80% of rental income, not a significantly lower amount…
Interesting what you find out from your broker when they have spent hours on the phone to the State Manager trying to figure out why a small amount and simple application for a loan has turned out to be rather difficult.
Again, another lesson learnt.
goldies wrote:So turns out CBA's lending policy no longer suits me as an investor. Had discussions with Broker and we have a plan to get this purchase through and then we will head elsewhere to another bank who takes into account 80% of rental income, not a significantly lower amount….Hi Goldie
Good to hear that it's been sorted (for this one at least).
Yep, sounds like it's time to move away from CBA. There are lenders that will take into account 100% of the rental income if the deal meets certain criteria.
There are also lenders who will take Other Financial Institutions (OFI's) debts at their actual value (not at an increased assessment rate) which can be very helpful for those nearing the serviceability wall.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
If $90/week is going to be a deal breaker, should you be borrwing the money?
Goldies .. historically for me .. CBA plays waaaay too conservative to make my deals work. So as far as I'm concerned thats their problem not mine.
I go elsewhere to make my deals work. Thats just what happens in a genuinely competitive loans market.
My suggestion is to sit down with a multibroker such as Aussie … or similar. Someone who has access to the broader market. And who is aware of your current limitations with the deal .. and who has the best approach for dealing with these limitations.
Scroll up .. you got two fine loan brokers sending you messages in this thread. *HINT HINT*
If you got figures you know you can work with .. just find a broker who completes the deal.
Think I might start private messaging the people who actually assist with their comments and read your posts properly.
@paullie – re read the post and then make a comment if you feel you can contribute in a positive way. I said there were 2 issues with servicability and 1 of them is that CBA is only taking into account $210 a week rent of $300 and then went on to say they have changed their lending criteria and only assess 60% of rental income. This was only one very SMALL part of the overall issue and I dont need advice on the first issue. I was basically wanting to know why CBA would only take into account 60% of my rental income. Just so there's no more confusion, the first issue is that my previous PPOR i have recently moved out of has been sold but has not settled as yet, and it is a massive dent in our servicability – so we have sorted a 'subject to settlement' of that loan deal. Cash is certainly not an issue.
@shape – I dont have credit cards, but thanks for the assumption
60%?? Is that now their standard?
Is there a table that someone could point me to of all the bank loan criteria, or is it a closely guarded secret?
Hi Matt
No hate to say very few lenders will give you the juicy bits being a customer but as a Broker the infomation is readily available.
As Jamie says a couple of lenders will take 100% of the rent where the LVR is < 80% whilst i can think of another that does not take rent into consideration.
Strange but true but thats lending these days.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
OK, so when your PPOR settles, that will free up a lot of cash flow. I take it CBA wont take that into consideration either.
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