Finance for 95% LVR

I'd like to buy a cash flow positive investment property, but have no borrowing capacity through traditional lenders who want to scrutinise my financial position (not pretty).
Does anyone know if there are private, individual lenders who are willing to take a mortgage over a property with an LVR of 90-100%?
Or am I dreamin' (again)?

 

Why isn't your financial position pretty?

if you need good servicing AND high LVR you'll find it difficult - the generous lenders are pretty much limited to 80% LVR.

Rams might be an option for you if you haven't tried them.

 

It's a long story.

Thanks for your suggestion Jess, but companies will not be helpful. I need someone for whom the property itself will be sufficient security for the loan. No tax returns or financial statements.

 

Nope nothing that I know of then.

 

You are dreaming!

 

What you're asking for is a No Doc loan which does not exist at any LVR.

Here's what you're asking for:
- A loan with no equity left in the security (if they have to sell, they won't get all their money back).
- The property will positive geared (these only existing in high risk areas so there's a very high probability that it will not remain positive geared).
- No demonstrated capacity to repay the loan should the rent not be enough.
- Implied that there is a bad credit history.

This is effectively asking someone to give a significant sum of money with almost no hope of getting it back.

Ask yourself honestly, would you lend money to someone under these circumstances?

 

No borrowing capacity. No deposit.

Its unlikely to work for you. There's usually always a way to finance most problems as someone will be willing to fund you (private funders in this case) - but the price will certainly make the investment go from positive cash flow to severely negative.

As Peter alludes to, the risk of repayment is high, so the price is high.

 

It's probably a good idea to start considering what you could do to improve your situation rather than looking at alternatives.

If you are wanting a build a portfolio, you will need a stable income and deposit to get started. Otherwise, it will be very hard to get funds to buy a property and if you do find the funds, there is a high probability it will be very, very expensive.

Here are some tips to help your situation:

- Get a stable source of income.
- Start saving as much as you can.
-If you have a bad credit history, waiting some time to pass can help improve the bad marks on your file.
-With all the spare time you now have - learn as much as you can about property investment so you can well prepared when you are actually eligible for a loan.

Of course I don't know enough of your situation. The above points are just a general guide.

 

You're right folks. Thanks for not ROFTL* (or maybe you did!).
I was dreamin'.

*Rolling On The Floor Laughing.

 

Well not on a coded loan.

 

Is there any lender who would lend at 95% LVR excluding LMI ??
For investment property. With all docs available and good serviceability.
As a standalone loan.

 

Implying that an uncoded loan is a possibility?

 

Not at 95% LVR on residential property.

Although I guess there are things like short term loans where it's funded based on a clear exit strategy and secured by a caveat. Rates are around 3-4% (per month).

 

Yes.. if u r a medico, u ca n get 95%LVR without LMI with westpac or BOQ specialist. interest rate is not competitive though.

 

Yeah apparently quite high number, however I'll need to have it 95%.
I tried to find the lender that would have a product for that but no one had any.

 

Haha cheers mate, if i was a medico wouldn't probably need a loan with 95%.

 

No but it certainly helps you spread your funds across a number of properties if you are starting our and have limited equity / cash.

 

I'm waiting on pre approval for a 95% IO investment loan from CBA, interest rate is 4.26%
Seems to be a slow process

 

You know they only go to 95% including LMI, So you'll actually need about a 7-8% deposit, plus enough to cover stamp duty and buying costs.

How long since it was lodged? Bank or broker?