help,difference finance for apartment and unit

Viewing 5 posts - 1 through 5 (of 5 total)

JLillian
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@jlillian
Join Date: 2004
Post Count: 9
May 26, 2006 - 7:35 am
I just know that buying an apartment only can have 70% home loan , while 80% for unit. Can anyone tell me why banks have this rule? Does that mean an apartment is less value than an unit if they are in same condition?[blink]
NewMoney
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@newmoney
Join Date: 2006
Post Count: 39
May 26, 2006 - 8:35 am
Hi Redfox,
Sounds like apartments may come under the Commercial Property umbrella, and therefore require the 30% deposit.
From what I’ve seen, even in times of spectacualr increases in property prices, apartments tend not to be great in the capital growth stakes, but with a 30% deposit they tend to be positively geared. Just remember what it is that you want from the transaction – growth or cashflow – or both [biggrin] before making your mind up and you’ll be fine.
All the best,
Mark.
Derek
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@derek
Join Date: 2004
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May 26, 2006 - 11:01 am
A short but simple answer – if banks lend less as a percentage then it means they consider that particular type of property as a greater risk.
In effect this means that the banks consider your apartment as a greater risk than the unit in your example.
Note some lenders will stretch the 70% limit on apartments from time to time.
Derek
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Richard Taylor
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May 26, 2006 - 12:46 pm
Sounds to me like the unit might be small in size or unusual in nature because i have never come across any lender that will only go to 70% LVR against the security of a standard size unit.
Richard Taylor
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Terryw
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@terryw
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May 26, 2006 - 1:22 pm
I have never heard of that ‘rule’. I have helped clients purchase apartments/units with 95% loans many times.
BTW, what is the difference between an apartment and a unit?
Terryw
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