Borrowing Capacity low.

Discussion in 'Investment Strategy' started by yoyo_guitarist, 9th Apr, 2022.

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  1. yoyo_guitarist

    yoyo_guitarist Well-Known Member

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    What would one do if they had exhausted all their equity and any savings dedicated to property and the most you could spend on another IP was 200k. Would you buy a cheap regional or unit somewhere or hold off for a while and build up some more equity. I feel like anything the banks can offer at that time should be used ? As who knows what policy’s are in store, all other lenders have been exhausted.
     
    yoyo_guitarist, 9th Apr, 2022
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  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Risk profile question I expect ?

    Is your broker or banker telling you are out of borrow cap ?

    Many folks that say that arent actually out per se, just out of borrow cap with lender X

    ta
    rolf
     
    Rolf Latham, 9th Apr, 2022
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  3. yoyo_guitarist

    yoyo_guitarist Well-Known Member

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    They applied for 2 loans and a equity release which has been approved. It’s just that the 2nd of the 2 loans had come back low so can only purchase property at 200k.
    This particular lender is at capacity and the broker said there’s is only one other lender left and they have very high rates and to perhaps use as last resort.

    Should They just get a place for 200k with the current one as it’s already good to go ?
     
    yoyo_guitarist, 9th Apr, 2022
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  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Who are those 2 lenders?
     
    Terry_w, 9th Apr, 2022
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  5. yoyo_guitarist

    yoyo_guitarist Well-Known Member

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    Pepper is the one now and I things it’s a
    Pepper is the one going with at present and Liberty is the one we were going to use as a last resort. But as I said I can still get something for 200k now but will probably resemble a dog kennel
     
    yoyo_guitarist, 9th Apr, 2022
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    David_SYD and Terry_w like this.
  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    That is the end of the road usually - but you could potentially go further still depending on the circumstances.
     
    Terry_w, 9th Apr, 2022
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  7. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Liberty isnt well suited to a long term buy and hold fprmost borrowers due to the high variable rates especially if one has 3 or more Ips, where the pro investor cops a .75 % loading on an already high rate.

    They are very good for a deals that are middle term spec deals, like a subdiv that a client recently completed, where the cost of the rate was " cost of the business"

    ta
    rolf
     
    Rolf Latham, 10th Apr, 2022
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  8. yoyo_guitarist

    yoyo_guitarist Well-Known Member

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    Be r free
    Red de Ty Ty get tgy
    Thanks Rolph, so po
    Thanks Rolf, so potentially if I am looking to do a sub division and put 2 duplexes on the block then liberty might be worth while?

    so In The mean time is it worth taking what pepper can offer to me at the moment. This will be my fourth loan with them. Only issue is is a 200k property worth the Hassle? Would really need to be a diamond in the rough deal I guess
     
    yoyo_guitarist, 10th Apr, 2022
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