All Topics / The Treasure Chest / No doc loans on Rural A or B properties

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  • Profile photo of TaraAndreTaraAndre
    Join Date: 2002
    Post Count: 9

    There is some good information on lenders on the site.
    Some posters talk about buying wraps in rural towns
    has anyone been able to do a no doc loan on a Rural A or B

    The best we were offered was 8.8% and 60% of valuation
    on a no doc loan for our Rural A property. I have rung about 10 lenders in the area many said they could organise no doc loans at around 7% and 80% of valuation but wouldn’t even look at Rural A.

    Another down side is that since lenders brought in this new
    attitude to Rural A it reduces the buyers who can buy our house.
    They fall in love with it but when it comes down to financing
    they need 35% of the deposit.

    Profile photo of FWFW
    Join Date: 2002
    Post Count: 478

    Please refresh my memory – what’s are Rural A and Rural B properties?

    Keep smiling
    Felicity 8-)

    Profile photo of TaraAndreTaraAndre
    Join Date: 2002
    Post Count: 9

    Hi Felicity
    Not sure exactly how Rural A or B are
    catagorised. Rural A for example could
    be Rural pursuits.

    If members are thinking about buying properties
    with acreage out in Rural areas I would suggest
    they first check with their lender on interest rates
    as well as how much % they can borrow on valuation.

    Profile photo of Steve McKnightSteve McKnight
    Join Date: 2001
    Post Count: 1,763


    My advice is to check the council zoning for the property as a guide to what lenders will use as the basis for classification.

    I know that anything zoned rural comes with alarm bells from a financiers point of view.

    As a general rule:

    Residential: 80% LVR (higher with mortgage ins. or other security)
    Commercial: 80% – 70% LVR
    Industrial 60% – 70% LVR
    Rural: 60% – 70% LVR

    As far as mortgage insurance goes… the magic figure seems to be 14,000 people or more in a location, although this varies from lender to lender.


    Steve McKnight
    (holidaying in the Sunshine State where is was cloudy all day – the sunshine business looks like a marketing sham to me [:P])

    Steve McKnight | Pty Ltd | CEO

    Success comes from doing things differently

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