Hi All,
Thanks in advance for the advice. I’ve been told by my broker that there are some places the banks categories as Category 1, 2 etc and there are banks that won’t lend investors if it’s in Category 1.
I’m looking at purchasing 2 investment properties which are in regional NSW and looking at a 10% deposit for each. Has any been declined of a loan because of the area of the property and if so is there a way to get the banks to provide the loans for these areas?
Thanks,
JTIt comes down to the lender – but this is very easy to manage, you shouldn’t have any problems if your broker knows what they’re doing.
Category 1 is actually the best type, its cat 2 onwards are seen as higher risk by insurers/lenders.
As always, if you’re concerned whether your broker is able to complete slightly left of centre transactions, I’d suggest using a good investment focused broker.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Thanks Corey for the response. I might see how he goes and contact you if i don’t get the results.
Thanks,
JTHi Jprop,
Most lenders will shy away from Regional lending due to the low population numbers and sales. Also the prices are much lower and in some cases land size is outside their policy guidelines.
There is 2 lenders that come to mind that are happy to assist Australia wide with no postcode restrictions, this means there is no discrimination of regional or city. Lending can be catered for the deposit amount that you have.
Hope this helps =D
Hank Hong
Email MeGoogle Hank Hong he's pretty cool.
JT we do a lot of loans in regional Australia.
If you want to email me some suburbs or post codes be happy to look for you and tell you what is your likely lvr.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks Hank and Richard. Richard i’ve sent you an email of the post codes.
thanks,
JTHi All,
So i asked my broker if the bank refuses to provide the loan, what are the options? This is the answer he provided below:
“Go to another lender that does SMFS loans that accept the security and the LVR”
Is this the option you would take as well?
I don’t really know how SMFS loans work but how my structure is set up is company/trust.
He has said that the area is Cat 4.
Thanks for your advice.
Thanks,
JTWhere are you looking to buy regional I assume broken hill/Wellington type areas if normal loans don’t apply? There are plenty of opportunities in regional hubs with 50,000 plus population with cahsflow and capital growth prospects that 10% is no issue. What are your goals in the long run? SMSF are a vehicle for retirement wealth not current wealth. I assume you want cash flow in your pocket from day one?
Tony Fleming | Triumphant Property Group
http://www.triumphantpropertygroup.com.au
Email MeNSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury
Hi DK,
Not quiet there but in the Riverina Region. I would want cash flow in my pocket to put back in the loan and invest. If this is the case SMSF is not the right option?
Thanks,
JTNot for that strategy. You can’t draw equity out of a SMSF loan so for example you bought a $200k property p & I in SMSF 5 years later you’ve paid 20k off and its now worth $300k. You can’t access the $120k unless you sell can’t even use it as security for another property. In your personal name you would be able to draw the majority of the equity out to reinvest if your serviceability allowed it. Good luck with it all :)
Tony Fleming | Triumphant Property Group
http://www.triumphantpropertygroup.com.au
Email MeNSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury
Also if you do buy in your personal name. Make sure you use offsets to help pay down your loans not just putting money off the loan. If you redraw to reimvest it won’t be tax deductible.
Tony Fleming | Triumphant Property Group
http://www.triumphantpropertygroup.com.au
Email MeNSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury
SMSF have harsher restrictions on security, even more then normal lenders as they need to keep in mind doing the right thing for Super.
Hank Hong
Email MeGoogle Hank Hong he's pretty cool.
Compeltely agree with the Dark Knight!
Hank Hong
Email MeGoogle Hank Hong he's pretty cool.
Thanks DK and Hank for the advise. I will be purchasing the property under Company Name As Trustee for Trust. It will not be under my name.
Will see what happens but i will let my broker know that i’d don’t prefer that as an option.
Thanks,
JT
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