Hi Everyone,
I found this site by accident but I wish I had found it several years ago. We have purchased a property without first talking to our broker (yes big mistake) and the property has 4 dwellings on the one title.
My broker has advised that this would be classified as a commercial loan. The problem is that we do not want to do it under a commercial loan as we would be paying more in interest.
Has anyone had any experience with this? We can afford the loan fine but we are in a bit of a tangle.
Regards
Sammy
Hi Sammy
Should be possible under resi depending on the LVR and postcode.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
What is the Purchase price amount? What is the LVR you are wanting? What is the postcode? What are the dwellings, i.e. houses, units, boarding homes, etc?
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Hi Guys,
Thanks for the quick response. We purchased the property for $620,000 and the LVR is 90-95%. They are individual houses and the property is within 15 km of Perth CBD.
What's your thoughts?
To be surprised if CBA credit will only go to 90% if again things are tight with the valuation. So be prepared for this as plan B.
Are the dwellings fully self contained? Are they rentable? Do you need rental as part of the servicing?
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Step 1: Ask for an extension to the cooling off period. Assuming the rest of the application is ok, i,e, servicing etc, your biggest issue will the valuation.
Also you will not be able to do the valuation upfront so you need to buy time ASAP as the valuation will be done after assessment. So we will not know where you are at until vals done. Your biggest problem will be the rating that come back with the valuation. If its a 4 then the senior credit officer will consider but if its a 5 then you are gone. The big question is 'are there recent and comparable sales in the area'? If yes then this is good.
Step 2: Tell your broker it can be done via CBA under a residential application. He needs to ensure that the overall application is as strong as possible. This will assist credit's decision if things are tight with the val ratings.
Step 3: Get him to escalate the application ASAP because vals will not be initiated until assessment has been completed.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Wow thanks Shahin.
Yes there are recent sales – there were 3 properties that sold recently that were quite similar. Yes the houses are self contained and we are using them as part of the application.
I'm not sure I want to go back to my broker based on the above!
Ok recent sales will help you. Print these out and give them to the broker to submit as part the application. Im sure the valuer will know this anyway but better to be safe. If you are using the rental on the dwellings then you need to ensure that they are in a rentable state as the valuation will also value the rent.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Thanks Shahin!
CBA's DUA with genworth stops at 3 dwellings. I would be reluctant to use them for this.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
They do 4 unless the loan amount is over $1mil.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
I've got a 4-pack (units) financed with CBA under a residential loan. With CBA, 4 or less is resi, 5 or more is commercial.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
You can definitely do it with CBA. The issue will be around the risk ratings. If there are any 5's then its not doable.
You cannot order the vals upfront for a property that has 4 units on the one title.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Happy to be corrected if I'm wrong but last time I checked their DUA didn't go above 3 dwellings which means this will end up with Genworth.
I know CBA will fund 4 properties – but at a 95% lend, I'm not sure whether genworth will like the deal.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
I know CBA will look at it. But are you 100% sure that it will be considered under their DUA? I'm pretty sure they wouldn't last time I checked, but if I'm wrong then that's fantastic news for Sammy.
Either way, it won't hurt for the OPs broker to check whether CBA's Direct Underwriting Authority (DUA) covers 4 units. It's just a phone call.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Yes I have done 3 at 90% and 1 at 95%. All were approved. They all came back with 4's for market but they were countered by recent sales and overall the applications with either good or strong.
They will only decline it if the application itself is borderline and you need the rental for servicing and of course you get a bunch of 4's for rating (even one actually).
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Sounds like they were on separate titles though?
Either way, it doesn't sound like there's too many options available to Sammy apart from CBA.
NAB at 90% might be possible as well. It was doable a year ago but things could have changed (I was told max was 3 recently). You couldn't cap LMI on this though because credit scoring will be brutal.
p.s – I don't want it to sound like I'm nitpicking, because I'm honestly not. If they do 4 on one title under their DUA then that's fantastic news.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
The 4-pack was and still is all the one title… it settled 2 years ago. Not sure if CBA has changed their offerings since then.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Yeah I was using NAB quite a bit on those applications but they recently changed it to 3. Also yes they are definitely 4 dwellings on one title. They need to be dwellings though – not boarding homes, etc.
Sammy – please lets us know how you go.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Watching this thread with great interest! Sammy remember to get onto insurance as well. Try GIO if you get stuck for options.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
