Terry has hit the nail on the head.
Nothing in lending these days is simple.
What a lender did last week may not be the same as they do next week.
Normally upto 4 units on 1 Title can be done on resi terms although 1 lender will go to 6 (albeit they want a higher deposit amount). Of course there is residential terms and there are residential terms.
Take a lender like Anz they wouldn't touch even at a 60% lvr and with 2 unit on the same Title i.e Duplex wouldn't go past 70% lvr. To go to 90% you need a specialist lender or a lender that doesn't realise they even do such a loan and there are a few of those around.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
rickim wrote:how come the number of units on the title has such an impact on financing?Here are some reasons I am aware of:
Generally tenants prefer to live in unit blocks that contain fewer units. More units equals more noise and other such conflicts between tenants. This all leads to the fact that all other things being equal (condition, location, facilities etc) a rental in a unit block with lots of units is less desirable than a rental in a unit block with fewer units. So you have an increased risk exposure of vacancies, which means you could struggle to meet your repayments.
The more units in the block, the higher the pricetag of the unstrata'd unit block. The higher the price, the fewer buyers there are you can offload the property to if you need to get rid of it. The bank will see this as a risk of them losing money if they have to offload the property in a mortgagee sale.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Jacm – thanks for the insight. When you lay it out like that I can see how the banks may view my plan
Richard – what do you reckon the likelihood of getting finance is in today’s lending market with 10% finance? Should I even bother or would you recommend just waiting and saving a further 5-10%? Will that even be enough?
You mention there are plenty of lenders out there that might finance my venture but at what cost to me? Higher rates, less flexibility, lower LVR? Or is there actually a possibility of getting some sort of competitive finance and just a matter of knowing who to go to?Hi rickim, I suggest getting in touch with Richard directly and asking him to arrange the finance for you. The banks pay the brokers their fees, not you the client. So if the fee worries you, put that out of your head. It is sooo much easier having a broker arrange the finance. They know which lenders to go to for your circumstance and the type of property you are wanting to buy. Richard's a very knowledgeable operator… he's arranged three mortgages for me this year… one purchase inside a SMSF, one unit block, and a refinance of a freestanding house.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
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