Serviceability Brick wall

Property 1: investment property purchased for $520K approx 2 years ago with 20% deposit. I haven't had it revalued but I suspect its worth $650-700K. Currently rented at $550 pw.

Property 2: My PPOR purchased almost a year ago for $286500, again with 20% deposit. Not sure if any capital increase. Rental appraisal $290-300 pw

My Current income from my job is approx: $77K plus a HECS debt of approx $20K, I dont have any credit cards.

I approached my bank to look at options to purchase another PPOR and rent property 2. The most they will lend me is about $280K. I was hoping for more like $500K. Stated reason is that whilst my LVR is ok, my serviceability is crap. I cant source any new income.

Ive briefly spoken to a broker about it and it seems Ive hit a brick wall.

Any suggestions!?!?

What are the outstanding loan amounts and what is the interest rate that you have on them?

Maybe you could refinance those loans and reduce your repayments, also are the loans I/O or P&I?

Did your broker check a number of lenders as some lenders will lend more then others.

Hiya JB

Even brick walls have doors :)

Often we just need to find out who has the key

Speak to an independent broker(s) and see what more feedback you get

brokers arent created equal

Both loans are interest only via St George.

Outstanding loan on property 1 is: $417,000, Variable interest rate is 6.23%

Outstanding loan on property 2 is: $228,000, VIR of 5.43% (discounted rate until 31/08/11 and then it will switch to the same rate as property 1)

It was only a quick telephone conversation with a broker.


Firstly i would recommend not speaking to a bank but spending a bit more time with a broker and not discediting the one you "briefly spoke to" but someone with experience in investment properties. Remember there is more than one way to skin a cat. Firstly get both properties valued, see if they are inline with what your/your current lenders expectations are, if you go by the figures mentioned you do seem to have a bit of equity to use. There are a couple of very good brokers here on SS that may be able to assist.
There are a few lenders who will take the actual payment on OFI loan rather than applying a serviceability rate which will dramatically alter the amount which can be borrowed.

This is just one of many factors which will determine the amount you can borrow.
Id say u have some legs
..................just working on the basis that STG hasnt the best servicing model and in many cases comes in at very "average" for ost investors