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Rent as sole income for servicing

Discussion in 'Property Finance' started by beachgurl, 13th Jul, 2015.

  1. beachgurl

    beachgurl Well-Known Member

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    Is it still possible to obtain finance for a property based on rental income alone? If so, what sort of LVRs will lenders go to?
     
  2. Redom

    Redom Mortgage Broker Business Member

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    Yes, can be done at 80 with quite a few. If you need to go higher, possibly, but lender choice will be important and limited here. Probably best avoiding credit scoring lenders too as it may come up as an issue.

    Will likely need to show tax docs to prove income (treated similar to self employed as professional investor) - statements alone are unlikely to suffice with most.

    Cheers,
    Redom
     
    Last edited: 13th Jul, 2015
  3. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    You'll have to be heavily cash flow positive to be able to service all existing debts + living costs and still have funds left over to borrow, but certainly possible.

    This is a lot easier for commercial lending where there are lo/no doc products which are reliant on the rental income of the security, than the borrowers entire assets and liabilities.
     
    D.T. likes this.
  4. tobe

    tobe Well-Known Member

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    I did one recently without tax returns, rental statements or even a lease agreement.

    It was for 3 unencumbered properties to buy a fourth. The current properties were self managed to the short term market, so we went with a lender who used the rental assessment off valuations.
     
    Jess Peletier likes this.
  5. Redom

    Redom Mortgage Broker Business Member

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    Neat. Did the lender pay for the vals tobe?

    My last one was at 80 with Macq a few months back, it was a reasonably simple approval, tax docs were requested though (but wasn't an issue for the client). The client had 20+ properties, retired early (ex successful SS'er that was on a beach! :)). So getting vals on each as rental verification wasn't possible, and tax docs were readily available.
     
    Last edited: 13th Jul, 2015
  6. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Which lender Tobe?
     
  7. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    Definitely the smart way to go about it.
     
  8. tobe

    tobe Well-Known Member

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    ANZ, they paid for the vals. A couple were their special rental estimate desktop things too.
     
  9. euro73

    euro73 Well-Known Member Business Member

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    I've placed several 100% rent reliant deals for one couple, with Macquarie (until they changed their calc) then FM ( until we reached exposure limit) and now more recently with Homeloans Ltd. We have had a significant amount of success in adding to the portfolio well after the majors and many others said "no more"