Getting loan

[airofu]

I am looking to purchase an IP but basically have no deposit but am happy to get a loan 100% if I can just to get started....just not sure how hard this is still?

At the momment have PPOR worth about $400k with $378k owing ....$20k in cash (prefer to leave this in offset for emergency) leaving $0 deposit for possible IP looking about $400k or less ....servicing is not the problem but how hard will it be to get a loan for this IP? should I speak to a mortgage broker for options? Essentially I'll just be paying mortagage insurance for having no deposit? Equity in the house can be used or not enuff? Thanks

 

[Fundamental]

Definitely harder than even six months ago.

St George would probably be your best choice. They still have an option to waive LMI and instead pay a higher interest rate on 100% loans - though that's probably on the way out.

Otherwise, that $20K in cash you have will be gobbled up by your LMI.

Another thin that St George are introducing is capacity - something banks used to look at all the time. You may be earning $200K p.a., but if you're spending all your income and not saving any of it, it shows lack of capacity to service the new debt.

Seeing as you're so highly geared, this may be a stumbling block.

The equity in your house isn't enough for the bank to look at it, though I guess if you cross colateralised the properties (not always adviseable) your LVR overall may be more appealing to a bank.

Where are you located? Let us know so we can recommend a mortgage broker for a face to face chat - there's plenty of good ones on here.

---

Ewan Fleming
Fundamental Finance
0402 279 266

 

[airofu]

I don't mind paying LMI as part of the loan...I'd rather get the loan to begin with then not.... I'm in Sydney thanks for the info.

 

[want2bewealthy]

Go see a good broker and they will be able to advise you on your options and scenarios for 100% lend vs 95% etc etc,

Ive got a really good one, I didnt think anyone would lend me finance for my last purchase let alone this new one thats the most expensive property Ive ever purchased before. . he calls it 'smoke n mirrors' he's good at what he does and I know I can service the debt so it's win win.

Or I couldve just 'accepted' the fact I couldnt afford to service another property but then I wouldnt be half a well off as I am now.

 

[airofu]

Thanks looks like a good broker is the way any recommendation in Sydney?

 

[want2bewealthy]

I don't mind paying LMI as part of the loan...I'd rather get the loan to begin with then not.... I'm in Sydney thanks for the info.

LMI doesnt bother me too much either, it just means (to me) that you pay a small 'penalty' for leveraging into the market even further and increasing your gains from other peoples money, I try to use the least amount of my money as possible so I can purchase more and have much higher leverage, Im only young though so this might not be a 'safe' bet for older investors that dont have time in the market as an asset.

One might call it 'balls to the wall' but thats what Im about and I have total confidence in my investments.

 

[Rolf Latham]

Tough Gig that

In the current climate I doubt any lender will bite without 10 to 20 % equity in other hard assets with a 100 % lend.

A little will also depend on where your current PPOR is and what a desktop val may show the current value to be.

ta
rolf

 

[want2bewealthy]

Rolf's a good broker?
you dont need to use local people these days,

 

[Fundamental]

If you read just half of Rolf's posts, you'll see that he know's his stuff