Trying to get finance

Discussion in 'Loans & Mortgage Brokers' started by blue89, 23rd Apr, 2020.

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  1. blue89

    blue89 Member

    15th Nov, 2017
    Hi all, it has been a while since I have been on the forum.

    I have found a property of interest to me and am thinking of buying in conjunction with a family member. Servicing the loan should be no issue, but the capital to put up for the loan is the potential sticking point, so wondering what flexibility or options we may have.

    Between the two of us, we have 4 houses with some equity in them, but not enough to put up 20% and avoid LMI. It will only be about 5% of the purchase price plus stamp duty. Just wondering what options we may have to secure the loan without any LMI?

    There is the conventional options of paying a larger deposit, however that money is currently set aside for the renovation we are part way through on our current home as well as COVID buffer. Or to look for an additional investor. I have close to $200k worth of stock which at this point I would like to avoid selling as there is (in my opinion) a lot of upside still on this stock, would it be possible at all to use the stock value to secure the loan? If so how does this work, and does it put any restrictions on the buying and selling of stock?

    The property is 4 units on the one title, if my brother was to move into one of the units, would it mean that we are eligible for a home loan rather than an investment loan?
    fritzsticker likes this.
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member

    15th Aug, 2005
    Gold Coast
    sounds very very convoluted

    I suspect you need to sit with a decent broker.

    5 % wont cut it

    Some lenders may let you get away with 8 % to 12 % depending on the security locn and the loan amount

    If you have equity in the other props then a valuer shop may release the balance you need

    Not a job for a banker or DIY in my view

  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

    9th Jun, 2006
    Australia wide
    To secure a loan without LMI you will need at least 20% deposit generally.
    And if it is 4 units on one title you would need a large deposit.
  4. Peter_Tersteeg

    Peter_Tersteeg Well-Known Member Business Member

    18th Jun, 2015
    4 units on one title has a limited number of lenders that will even consider it. A 20% deposit would be the minimum you'd need, but most would want even more.

    Honestly if you've got 4 houses between you and you've only got equity enough for 5% of this new deal, I'd say you're at the extreme end of leveraging and this may not be a prudent risk at this point in time.