Hi folks, Newbie to this forum. Was wondering if anyone might have some insights and be able to offer some help. Looking to buy our first place by the end of this year and was going to go to a broker in Aug/Sep. Live in Sydney, but looking to buy an investment property in Brisbane (were we are from) in the 530-550k range. Currently have 60k to tip in. Gross household income of 240k, no dependents. Do you think we would we get approved for what I think would be 97%LVR with LMI added on to the mortgage? I've had a good look and Bankwest seems one option and possibly BOQ too. Any advice appreciated.
I rarely deal in this space but would think it would be very difficult to get over 90% for an investment property these days.
I just check and both BoQ and BankWest are both capped at 90% including LMI (at least for brokers). The only guys I have playing in the 90-95% space are the mortgage managers, BlueBay, Homeloans and Better Mortgage Management. Unfortunately none of my lenders are doing >95% for investment at the moment.
There's not much around at that level - Liberty would do it but that's about it I think. Bankwest have a max of 90% for investment now.
@GK1611 I agree with Terry that it's very impractical to get a loan above 90% of the property value. There are some lenders that say it's within their policy, but in reality the chances of an approval are low. Even if the application is successful the interest rates are going to be extremely high. Even 90% loans are becoming problematic. Not hard to get approved, but all of the majors have restrictions and will only allow principal and interest. This isn't a problem for some lenders but I take it as a sign that things are going to get tougher, not easier in the near future. As a rough guide, you'll need the following funds to qualify for an investment loan. 10% for the deposit required by the lender. 5% for the stamp duty and general purchase costs. 2% for the mortgage insurance. Total 17% of the purchase price. This is a bit rough and can vary, but it will get you fairly close. The lenders you've mentioned (BW & BOQ) only allow loans above 90% for investment purposes but they do go to 95% for owner occupier purposes. Perhaps this is a way forward? Purchase the property as a first home buyer, live the for 12 months to qualify for the appropriate grants, then make it an investment.
No problems, thanks for this. We will wait till we have 80k and should be at 90%LVR by then throwing in stamp duty etc
@ Alternatively, if you own the property you're currently living in within Sydney, you could take some equity out of that property to finance part of your deposit.
Unfortunately not. First home buyer and even for us on good salaries it's out of the question and we need to live here for work. So might as well rent where we want and buy in an area of Brisbane that we know well and have friends who can assist if any issues with the property
That is unfortunate. I am in a rather similar situation, but I am using a family guarantee - have you thought of this as an option? The family guarantee is quite an effective way to get your foot in the door. This means, I will be able to borrow 100% and only pay closing costs - and at my current savings rate I can purchase another @88% LVR by the end of the year.
Hiya Your borrowing capacity looks pretty healthy - it's just the deposit that needs to be beefed up. Realistically - the minimum contribution these days is a 12% deposit and allow another 5% for stamp duty/purchase costs. So on a $550k purchase I'd *roughly* be looking to save around $93k Cheers Jamie
