All Topics / General Property / IN REGARDS TO LENDING/EQUITY

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  • Profile photo of dagsthedudedagsthedude
    Member
    @dagsthedude
    Join Date: 2003
    Post Count: 26

    say i found a house for 80k, will certain lenders fund an extra 20k for renovations?
    can you lend more than the house is worth, if they know it is for investment purposes?(or if you may have purchased it below market level)
    can you get around this scenario with a no-doc loan? any loopholes?
    any pros and cons?

    just something i was wondering……

    dags nobody
    the hippie investor

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Dags, no lender will lend more than the property is worth. In fact most will only lend 80% of what it is worth, or more-up to 95% in certain locations-if you pay lenders mortgage insurance (LMI – this covers the lender if you go bad).

    With low docs, you will generally only get 80% LVR or less.

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of AdministratorAdministrator
    Keymaster
    @piadmin
    Join Date: 2013
    Post Count: 3,225

    I spoke to a mortgage broker today who advised as Steve does that most banks will loan up to 80% comfortably but once it is over this amount it gets tricky. you would possibly need to look at getting a personal loan until your improvements can be capitalised on your property . But you would be better speaking to a mortgage broker who could steer you in the right direction. I think there are some good ones who can be very helpful. hopefully this helps
    kod

    quote:


    say i found a house for 80k, will certain lenders fund an extra 20k for renovations?
    can you lend more than the house is worth, if they know it is for investment purposes?(or if you may have purchased it below market level)
    can you get around this scenario with a no-doc loan? any loopholes?
    any pros and cons?

    just something i was wondering……

    dags nobody
    the hippie investor


    Profile photo of Mortgage HunterMortgage Hunter
    Participant
    @mortgage-hunter
    Join Date: 2003
    Post Count: 3,781

    All true, up to 80% is relatively easy and with LMI 95% can be achieved – even 97%in some cases.

    If you have additional security then more is possible – alternatively the reno money could be borrowed privately and then refinanced once the reno is complete and the valuation reflects the new value.

    Cheers,

    Simon Macks
    Mortgage Broker
    [email protected]
    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of dagsthedudedagsthedude
    Member
    @dagsthedude
    Join Date: 2003
    Post Count: 26

    cool thanks everyone!

    dags nobody
    the hippie investor

    Profile photo of The DIY Dog WashThe DIY Dog Wash
    Member
    @the-diy-dog-wash
    Join Date: 2003
    Post Count: 696

    dags

    We bought a serviced apartment at the begining of the year, it was our first IP and the bank lent us 104% of the value against our PPOR. After that we realised that we should have done it differently, but it is always worth talking to your lender, however the finance people on this forum are pretty spot on.

    Cheers
    Leigh K[:D]

    Carve your own path and lead the way …

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