Join Australia's most dynamic and respected property investment community

Residential loan vs Commercial loan for IP

Discussion in 'Property Finance' started by P j T, 2nd May, 2016.

  1. P j T

    P j T Well-Known Member

    Joined:
    25th Aug, 2015
    Posts:
    80
    Location:
    Sunny Belfield NSW
    Hi all,
    I have a question and hope to get an idea of where this might end up.
    We have found a 5 unit complex on 1 title and on single level in a very nice regional town in NSW.
    Comprises 1 x 2 bedroom unit and 4x1 bedroom units. Electricity on separate meters but water on 1 meter only.
    Would lenders via a good broker require such a purchase to be a commercial loan or would still be considered a residential property loan for an IP.
     
  2. Terry_w

    Terry_w Structuring Lawyer and Finance Broker - all states Business Member

    Joined:
    18th Jun, 2015
    Posts:
    14,079
    Location:
    Remote
    Commercial. I think Rams may be the only lender to consider it on a residential basis.
     
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    2,015
    Location:
    Gold Coast
    some will do it on resi term, albeit at lower lvrs

    ta

    rolf
     
  4. P j T

    P j T Well-Known Member

    Joined:
    25th Aug, 2015
    Posts:
    80
    Location:
    Sunny Belfield NSW
    Hi Rolf,
    could you enlighten a pleb like me what a resi term is and I think you are referring to a higher deposit? Correct?
     
  5. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    2,015
    Location:
    Gold Coast
    Comm loans are typically reviewable every year,and have slightly higher rates.

    That annually reviewable has killed many a golden goose.,its like applying for the loan every year again........

    ta
    rolf
     
  6. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    737
    Location:
    Sydney
    RAMS max 70% LVR. Your biggest issue is going to be the valuation and potentially the lack of comparable sales.
     
  7. P j T

    P j T Well-Known Member

    Joined:
    25th Aug, 2015
    Posts:
    80
    Location:
    Sunny Belfield NSW
    Me thinks this one is dead already.