I was going to buy an investment apartment off the plan but my bank will only let me borrow 80%. Is there a way in which I could borrow 90%?

Hi Alison,

The first question is when will the off the plan be completed. As most lenders will only issue a pre approval for between 3-6 months with the exception of CBA who will issue a pre approval for 12 months however they will only lend up to 80%. A lot of the second tier & non bank lenders will lend up to 90% with pre approvals ranging from 3-6 months.

Hope this helps & please feel free to contact me if I can help in anyway.

Hi Alison.
I could write a War and Peace length answer to your question but would like to better understand your situation first.
If you like, give me a call to discuss how to best progress this situation.

Hi Alison

As you have found; quite a few lenders had reduced the Loan To Valuation Ratio to 80% in the last quarter of 2015. This restriction was put in place to curb the rise in investment lending. Since then; most lenders have relaxed their policies and are now lending 90% of the property value again. Please note that this may be inclusive of the Lenders Mortgage insurance (this will vary from lender to lender)

As a side note; the pitfall of buying off the plan is that property values MAY fall by the time the unit is completed rather than rise. There has been some evidence of this in the past and price fluctuations are based on supply and demand. There is a concern that some suburbs are potentially over developed with unit complexes and as these complexes reach completion (along with others in the area); the market becomes flooded and this can drive prices down. Oversupply could also effect the rental return and vacancy rate as well. Make sure you do a little homework before you look at investing in an off the plan property; especially a unit to ensure that there are no other complexes due for completion simultaneously with complex that you are investing in.

Hi Alison

Researching the developer is a good start; however you need to do some research on the area you are looking at buying in as well. As I mentioned in my last post; over supply can effect the market value. Note that lenders will take the lower of the contract price or the valuation. If the valuation comes in lower then this is what the lenders will base how much they can lend against the property. If you are looking at borrowing 90% then this does not leave you much room to play with if the valuation falls short of the purchase price.

I have access to a couple of property research companies that take the guess work out of buying a property. They deal with trusted developers and complete a full analysis of the development, the area, rental returns, property value at completion ETC. This service is free to you as the research company receives a commission from the developer for the sale of the property. They are like a real estate agent but in reverse; in that they are working for you and not the vendor.

If you want to know more; please feel free to call me on 0414 727 308 or shoot me an email to:- sam@southwestlendingsolutions.com.au

yes some lenders will go as high as 95 %
you need to align yourself with a professional broker who has access to 100's of products and solutions .

Hello Alison, yes there are still a few banks that will allow you to go to 90%+LMI, depending on your circumstances. Happy to help further if you would like some assistance. Raj (0469 827036)

Hi Alison

Thought I would check in with you to see how you have progressed with finding a lender that will Lend you 90%?

Regards
Sam