type 1b properties

Discussion in 'Loans & Mortgage Brokers' started by Jobeki, 29th May, 2019.

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  1. Jobeki

    Jobeki Active Member

    Joined:
    19th May, 2016
    Posts:
    36
    Location:
    Brisbane
    Hi guys
    We bought a couple of years ago as our PPOR and had it converted legally to a type 1b property. We rent out downstairs and ultimately will rent out the upper and lower level separately or on a per bedroom basis (we live near a Uni) when we move out and buy a new PPOR in 2-3years. I am considering whether it is worthwhile re-financing with Westpac given the current $2K sign up bonus. We are already on a pretty good rate which I tend to call and re-negotiate with NAB every 12mths (although last time and probably this time by the sounds of it they haven't been able to offer better)...I think they are sick of hearing from me! We went direct to NAB for loan as my wife and I are health professionals and got the 90% no LMI. Currently on 3.89% P&I variable. LVR is probably around 68% (owe 550K est worth $800K. My concern is whether given it is now a type 1b property we could fall into commercial and it could be a lot more trouble to get approved? Any inside thoughts? and likelihood of being able to beat 3.89% with a major?
    Thanks for your help
    J
     
    Last edited: 29th May, 2019
  2. Cate Bell

    Cate Bell Well-Known Member

    Joined:
    7th May, 2019
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    Location:
    Australia
    We have a few properties with Suncorp, paying 3.61% I think it was called back to basics- an older product. I don't know about the other part of your question, but it sounds like a bit of a cash cow!
     
  3. Lindsay_W

    Lindsay_W Well-Known Member

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    1st Jul, 2015
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    Location:
    QLD
    Class 1B is essentially a boarding house in my understanding (correct me if I'm wrong) therefore most if not all lenders will deem it commercial*, and even commercial lending don't like boarding houses in my experience. Even if you found a lender you would struggle to beat that 3.89% rate with commercial lending.
    *Some lenders MIGHT deem it residential depending on the design/layout
     
    Last edited: 5th Jun, 2019
  4. 316Kenny

    316Kenny Member

    Joined:
    2nd Nov, 2017
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    Location:
    Sydney
    Would it be that obvious to the bank that it is a 1B building?
     
  5. Lindsay_W

    Lindsay_W Well-Known Member

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    1st Jul, 2015
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    1,285
    Location:
    QLD
    Yes