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Properties banks don’t like

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Your Investment Property | 21 Jan 2013, 12:00 AM Agree 0
Not all properties are equal, at least in the banks’ eyes, and that perfect investment property you’ve uncovered won’t always get a loan
  • Mim | 22 Jan 2013, 02:51 PM Agree 0
    You also missed many other types of property that the banks don't favour as security: student accommodation, managed apartments, retirement village units and units under 50m2. Some of these are not able to be used as security at all, so you must either pay cash for them or use another security against a loan to buy it. This is based on the difficulty of reselling these, and the time it takes to sell as banks want their monies promptly in the event the loan goes bad.
  • Peter Shizas | 22 Jan 2013, 02:56 PM Agree 0
    Also need to be careful of Unit groups especially if there are any bedsitter properties below 35 sqm within the group. Banks don't like to lend against these properties. A group of units that I bought which was heavily positive geared could only get a commercial lend despite there being far less risk for the bank as there were 11 separate units meaning 11 separate income streams.
  • Leah Marshall | 22 Jan 2013, 03:45 PM Agree 0
    Investors and owner occupiers should also seek advice prior to purchasing a small unit, student accommodation or a serviced apartment as lenders can restrict lending for these assets too.
    Remember, not all lenders are the same and that is why using a broker can be invaluable. Don’t despair if you are sold on your purchase because one lender's reject can be another's appetite!
  • Madaline | 22 Jan 2013, 03:47 PM Agree 0
    So true Leah. These scenario's are are perfect examples of where brokers are invaluable!
  • Country Brokew ( Bob) | 13 Aug 2013, 01:21 PM Agree 0
    Finance brokers are invaluable in dealing with Rural Resi Properties , we can get them done on properties up to 50 HA at 80% LVR . Two banks do them at this level , they cannot be LMI insured or be too remote and need to have access to services but some can be approved with solar power systems , but they can be done . Construction finance is also available ( I have just done a deal on a 38 HA Property) , Properties up to 25 acres are treated by all the majors as a residential property regardless of the zoning and normal lending criteria apply. People wanting purchase a Rural Residential Property should consult a well known Mortgage Broker in the region they are looking at buying in,.
  • Platinum Property Law | 13 Aug 2013, 09:44 PM Agree 0
    We have also noticed that if there is a shop or office associated with a Property (even if this is only very small) Lenders deem the Property to be commercial.
    Our client wanted to buy 2 townhouses with a small office leased out to a MP in the middle of them.
    All Lenders approached deemed the deal to be commercial even though the zoning was R2 residential.
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