403 parramatta road leichhardt

[scha9799]

I am interesting in buying a property at Parramatta road Sydney.

there is a shop front and 2 bedrooms on the top.


If I want to get a bank loan to fund this deal, is this classified as commercial lending or residential lending ?

what's interest rate like currently if it is commercial lending ? is the term and LVR going to be different from residential lending ?

Property address is 403 parramatta road leichhardt

Taylor

 

[DaveM]

Part resi part commercial.... it will be a commercial lend, but prepare for having 30% cash to put in at 70% LVR

 

[Rolf Latham]

70 at best

ta
rolf

 

[James m Dawson]

Id say you will need 70 % , also allow for stamp duty and legals , one idea is to get the deal done then strata the building into two lots- also check if you are able to build or develop in back yard if there is one. Ive got approval to build a two story apartment in the back of my building in bondi so will end up with three units- the shop , the existing apartment above that and the new one. I will strata into three lots probably refinance the two res apartments later on. There can be hidden gold int eh back yards- assuming there is access

 

[scha9799]

what's the term ? 25 years or 30 years ?

what's the current interest rate for commercial lending ?

 

[T33]

Commercial loans are generally shorter than resi such as 3 - 5 years (io)
Longer term products are generally principal and interest for say 15 years and fully repaid by end of loan.

Rates in 6 - 7s generally achievable if serviceability stacks up. Eg products by bank west, ing

Good luck

 

[Rolf Latham]

what's the term ? 25 years or 30 years ?

what's the current interest rate for commercial lending ?

adding to what's already been said here

Adelaide bank will go 25 years total term, but are a little pricey on the variable, depending on the transaction will go to 70 to 75% loan to valuation ratio as well.

they do have quite strict conditions though, having said that they have done deals for us that the majors didn't want to. This work is especially so where your client has a fair amount of other bank lending already, nd stems mainly from the fact that many of the mainstream banks want 1.5 plus times interest cover, and will use the add up to 2% as a margin buffer.

one other thing to keep in mind, where you have mixed use residential and commercial some lenders don't want to play ball if the lending is in personal names since they see that as being a potential regulated lending issue.

Most commercial is unregulated, either because of the security, or the borrowing entity

Thanks

Rolf

 

[Aaron_C]

Just to add if the floor area is more than 50% used for resi purposes, then a lot of the lenders won't touch it at all due to NCCP things.

 

[Rolf Latham]

Just to add if the floor area is more than 50% used for resi purposes, then a lot of the lenders won't touch it at all due to NCCP things.

and conversely the resi lenders wont touch it due to the commercial part use

ta
rolf

 

[scha9799]

Thank you guys

by the way what's NCCP ?

 

[Rolf Latham]

Thank you guys

by the way what's NCCP ?

National Consumer Credit Protection Act

Designed to stop consumers from getting fleeced by brokers, bankers and allied finance providers.

In reality, pretty much a "nationalisation" of a bunch of various state based credit codes, which are now administered by ASIC.

Generally a very good thing, but has caused some unintended consequences to certain borrowers and transactions


ta
rolf