< 50 sqm - 20% deposit

I understand that for a unit < 50 sqm, lender would only want to lend out up to 80% only.

I am very hesitant to use my liquid money to pay out the 20%.

Do I have any other option/s to pay this 20% deposit?

I have researched SMSF and it seems it's no go for me.
 
There are some lenders who can lend more than 80% for smaller apartments.

Other than cash, you might be able to use equity, that is a proportion of the diference between the valuation of your current property and the properties mortgage. Its not cash you have saved, or worked for, its cash you have borrowed from your house.

Remember, if you arent that happy about buying a smaller place, how will that affect likely purchasers and the valuation down the track?
 
There's a few lenders that will allow LMI with units as small as 40sqm. Below that size you're going to need a 20% deposit.

The smallest unit I've financed was 21sqm at 80% LVR.

I'm not sure where the SMSF comes into it, you're not going to get more than 80% on this type of deal regardless of unit size.
 
I understand that for a unit < 50 sqm, lender would only want to lend out up to 80% only.

I am very hesitant to use my liquid money to pay out the 20%.

Do I have any other option/s to pay this 20% deposit?

I have researched SMSF and it seems it's no go for me.

Why do it then if you're concerned about the 20%.

Surely this shows that the resale is limited, as it cuts out large section of the market.

And you yourself have the funds available and still don't want to commit the funds.


You could get the funds from another property if you have available equity.
 
Why do it then

We're in a need of small unit apartment for long-term stay.

The unit will eventually be occupied by my grandmother.

So needed something small & doesn't cost as much.

I've calculated both pros and cons for small unit. I can only think of these:
pros: smaller repayment.
cons: big chunk of outright (at the start) & hard to sell in the future? <although i'm still questioning this>

What's your thought on this? what should I do?

Is it better to rent long-term rather than purchasing small unit apartment/service apartment?
 
I think its a matter of opinion. If you dont want to rent, then you need to buy. If you have to buy in a specific area, then thats what it costs. if you want to borrow the bulk of the money, then you need to look at a bigger, and more expensive apartment.

My opinion would be to rent first, and research the market well first. It also gives your grandmother time to aclimatise and perhaps play an active role in what you purchase.
 
If you can find one that's 51sqm (still very small) you'll be in a much better position to finance, refinance and resell. Keep in mind that banks and valuers consider internal area only which is the floor area excluding walls and balconies.
Someone I know bought a '50sqm' OTP apartment only to find out at settlement time that the 6sqm balcony was a part of the 50sqm calculation and so were all walls. His bank said they would finance it but only at 70% lvr (which he wasn't expecting / prepared for).
 
If you can find one that's 51sqm (still very small) you'll be in a much better position to finance, refinance and resell. Keep in mind that banks and valuers consider internal area only which is the floor area excluding walls and balconies.
Someone I know bought a '50sqm' OTP apartment only to find out at settlement time that the 6sqm balcony was a part of the 50sqm calculation and so were all walls. His bank said they would finance it but only at 70% lvr (which he wasn't expecting / prepared for).

Very true. Also values often just guess at the size (some measure) so even if you think it is 51m2 they may err on the side of caution and say 46m2 or something

Also don't try and go off the strata plans for m2 size as the correct measurement is from the internal walls not external. Seen that too!
 
Just wondering if your grandmother is aware of what 'a nice little apartment' means these days?

I'd probably rather rent.
 
Hiya TheFinanceShop,

Say for Eg:Unit is 48sqm's + also car alotment on title....For arguments sake,does the lender take the car alotment on title in consideration to bump it to say 56sqm's?

Cheers Spades.
 
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