Where to get finance

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From: Cecelia Palmer


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Hi, just new to this web page and was just wondering if someone could =offer some advice for a friend. My neighbour is about 23 yo and lives =with his parents. No debt and approx $40k in the bank. Wants to buy an =investment property however two of the major banks have declined him as =his has no finance past - paid cash for everything including his car =$50k - main problem they say is that he is a casual worker - temp =however has worked at the same company for the past 18 months - earning =great money due to shift allowance. Is there any institution that =anyone knows of that would consider him for an investment property to =the value of say $250k.

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Hi, just new to this web page and was =just
wondering if someone could offer some advice for a friend. My =neighbour is
about 23 yo and lives with his parents. No debt and approx $40k in the
bank. Wants to buy an investment property however two of the major =
bankshave declined him as his has no finance past - paid cash for
everything including his car $50k - main problem they say is that he is =a casual
worker - temp however has worked at the same company for the past 18 =months -
earning great money due to shift allowance. Is there any =institution that
anyone knows of that would consider him for an investment property to =the value
of say $250k.

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Reply: 1
From: Rolf Latham


Hi Cecilia

Tis not the bank per say that doesnt like your friend, its the Lenders mortgage insurer (LMI) that covers the bank in case of default.

with 40 k for a 250 k purchase the Loan to valuation ratio would be around 87 % ish (this is more than the 80 % the bank will lend without LMI cover.

He would need to be able to show 5 % of the loan value as genuine savings, that is svae in regular lumps over a minimum of 6 months.

Casual need not be the killer. Many employers if asked will provide a letter oin the basis of permanent part time.

On a true casual basis no standard lender will provide the funds. There may be just enough for GE to consider him for their 85 % no docs lend. Obviously the rates are a bit high.

Ta

Rolf
 
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Reply: 1.1
From: Matt Cho


Maybe he could sell the car and throw
some in the bank every month. It is quite
an expensive liability to have at 23 a 50k
devaluing by the second lump of metal!

Consider
Matt {:)
 
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