Hi all, This is the first OTP purchase, coming to completion soon (in Brisbane) and we were wondering if we should use any lender/broker or should we be looking at a specific lender/broker who regularly deals with OTP purchases. Cheers.
Hi Peter Any broker or banker should be able to handle OTP lending. The biggest thing is going to be the valuation - don't submit any applications until you have got a couple of upfront valuations done. Some may come back lower than others. Also some lenders will go off the higher of the valuation vs Contract of Sale value so it would be obviously preferable to use these lenders.
Yep, get a valuation done with a lender that will use the valuation figure (if higher) as opposed to one that will default to the contract price regardless. NAB will do this and their val system is simple and efficient. If you are expecting a val shortfall make sure you have the funds available for the shortfall!
Any decent broker will be able to help. There's some awesome ones above. Take note of the upfront val comments - particularly if you're looking to borrow greater than 80% LVR Managed to avoid LMI on an OTP purchase in Syd recently because property had increased in value from when clients exchanged and settled. Client only had a 10% deposit - but the growth in the property coupled with the deposit lowered the LVR to sub 80% Cheers Jamie
Definitely get a broker, check your contract, you most probably only have 14 days to settle once settlements are called and this includes non-working days. Get a broker on board and get all your documentation lined up ASAP so you can get a conditional approval now.
Wow! Lending against valuation even when higher than purchase price. I thought that was a myth! Thanks guys, really appreciate the help.
Only with some lenders and you have to ask and they have to get it signed off from above. @CosmicTrevor is correct as once titles are issued its all on but before titles you need to get a final val done. If its all lined up it will run very smooth but if not, well it wont. You will automatically get penalties applied by the developers solicitor at settlement if you go over agreed date as per contract.
And whether the OTP is a CBD apartment. Any reasonable broker who has been in the game long enough will understand the ins and outs of OTP lending, it's not that difficult, just a few little variances between the lenders and how they treat it.
In my experience, I think you should find yourself a broker who is well versed in OTP lending. The main concern here would be the valuation if you bought in the CBD as they are expensive and over-supplied. An experienced and well connected broker can pull a few strings for you through their contacts at the bank or valuers and maybe get you a higher valuation. While someone who doesnt know much about OTP will just come back to you and say sorry your loan got declined.
Thought I'd say thanks to all who replied. You've all given really helpful insight. Valuation came back at cost, so we're very happy (and shocked) with the outcome. Now, to find a tenant!
