Studio Apartment Advice

[FutureBound]

Hi there
I was told that you can not use the equity or use a studio apartment as collateral - is that true and what other real estate can u not use.

 

[The Y-man]

I can't see how that could be true.... unless you are wanitng to 100% gear a studio apartment in CBD student accomodaiton block?



Cheers,

The Y-man

 

[tobe]

Most Mortgage insurers will not use these types of security as collateral. most banks will only lend up to between 50 and 70% of the securities value. It very much depends on the banks policies, and your overall income and equity position. Most lenders may also discount the rental received, as serviced apartments are usually let at a higher rate than normal apartments.

 

[Rolf Latham]

Depends...............whats the size and the locn ?

both Comm and St george arent usually bad on these

ta
rolf

 

[Dragon]

Yea, let's not confuse Studio with Serviced apartment.

If it is a studio apartment, we can certainly lend on it.

If it is a serviced apartment, we can also lend on it, but at a reduced LVR (70% for >50sqm and 50% for <50sqm down to 25 sqm ).


For a guide, if it is a studio apartment above 25sqm , we can lend 80% LVR, but we take 60% of the rental income. Presumably because it may stay vacant for longer due to a smaller size (speculating here .....)

If it is a one bedroom apartment ( not a studio as it has a separate bedroom ) , then we can lend 80% still, but floor area to be greater than 45sqm.

We probably provide the most generous policy in this area.

 

[Bradsdad]

Hi there
I was told that you can not use the equity or use a studio apartment as collateral - is that true and what other real estate can u not use.

I wouldn't say this is completely true. use of a studio will depend on such things as who the lender is, the size, it's use, management agreements (if any), it's location LVR required and a lenders exposure to that particular address.
It maybe possible to use 1 particular lender to utilise some of the equity and use another to complete a seperate purchase if that's your aim.

The 2nd part of the question is too broad. I would suggest that almost all real estate could be used to a certain degree depending on the lender. What 1 lender won't touch another may. Limits on LVR's however may be restrictive.


Regards
Steve