All Topics / Finance / Impact of a personal loan on ability to get a mortgage

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  • mattnz
    Participant
    @mattnz
    Join Date: 2007
    Post Count: 574

    Hi all,

    I have alot of my cash currently tied up in a good investment (can’t refinance the investment), but want to be able to invest in a few properties coming up. I have a good income of $120k, so access to significant loans (around the 800k mark), but am lacking deposits.

    I work for a bank so can get very good finance deals with 10% deposit and no LMI. I can also access personal loans at a hugely discounted rate.

    If I have $40k in my bank account, could I borrow $40k as a personal loan for my next investment property (around 400k) and then use the initial 40k for a second investment property also around 400k in value?

    How much would the personal loan of 40k impact on my mortgage limit? just 40k less or is there a higher multiplier?

    Thanks,
    Matt

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

    Personal loans are usually short terms like 5 or 7 years max. That means the repayments are very high and this will affect serviceability much greater than a home loan of the same amount.

    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

    mattnz
    Participant
    @mattnz
    Join Date: 2007
    Post Count: 574

    Thanks Terry,

    Thats what I was concerned about.

    My other idea is lending myself money from my super fund at 10% return. Does anyone know if this is allowed under a SMSF?

    I don’t have enough in my super fund to get a loan on its own, but would have enough for a property deposit for me personally.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    You are unable to access funds from your SMSF for a deposit on a property which you or a related party purchase.

    Richard Taylor | Australia's leading private lender

Viewing 4 posts - 1 through 4 (of 4 total)

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