Lending Criteria on sub $100,000 unit Grafton

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geedeepee
Participant
@geedeepee
Join Date: 2012
Post Count: 1
March 26, 2012 - 10:19 am
Hi All,
I’ve been a long time reader on these forums, however I’ve just landed a new job and I feel I’m ready to dip my toe in the water so here goes:
I am looking for info on the likely lending criteria for the following:
Location: Grafton
Price: $72,000
Property: 1 Bedroom Unit (37sqm)
Rent: $140pw (currently tenanted)
Council: $600pa
Strata: $1,500pa
My Income:
Base: $65,000 incl. super
Comm: $1,000 – $4,000 per month (gross incl. super, avg, $2,000)
Living at home – no rent
My question is, given that I could easily afford this place even it were to sit vacant, what sort of deposit would I need if any?
The issue is I have been paying rent of about $1,100 per month for the last 14 months while I was in a low paid job so I haven’t built any savings. Is there any way of doing this with no money down?
Hoping to go with a P & I loan to build equity from rent and make extra monthly repayments of about $500-$750.
I could get family to guarantee any loan for me if required.
Any advice would be greatly appreciated.
Mick C
Participant
@shape
Join Date: 2010
Post Count: 1,099
March 26, 2012 - 2:15 pm
Firstly welcome to the forum! hope you enjoy your stay.
With any property these days you will need a min deposit of 5% ( for high quality/safe property + strong application) , now given your unit is in a Category 2 area + it’s under 45 squ meters you will be looking at a min deposit of 10-20% ( 90-80% LVR) depending on the lender….
Is there any way around this?
1. Not really, unless you buy a “higher quality”/ safer property ie larger then 45 squ meters + not a studio or service apartment etc…
2. Unless you can get your parents as guarantor with their property ( presuming their home has usable equity)
3. Find the required deposit

Note:
– If this is an investment, it will be wise to keep it as I/O
– with a purchase price of $76,000, will need to find a lender that allow small loans size of under $100,000
– If you paid rent to an real estate agent and never missed your payment; then some lenders like the Dragon can consider this as “genuine savings” , but the key is that you will NEED some savings…ie not possible at 100% finance.
Regards
Michael
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
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Scott No Mates
Participant
@scott-no-mates
Join Date: 2005
Post Count: 3,856
March 26, 2012 - 9:16 pm
As the unit is <50m2 you will find that financing will be more difficult ie greater deposit required.