I own a commercial terrace in Sydney with an office on the ground floor and a self-contained residential apartment on the two floors above (with its own access). The property is on the one title and isn't strata. I'm having a hard time finding a bank that wants to refinance the property and I'm not sure why - I have tons of equity in it. Can anyone suggest a good path to go down to get the property refinanced?
On the face of it - the security should not be an issue being mixed security.
As all three properties are on one title and one of these properties are a commercial property this will need to be dealt with commercial lenders and not with residential policy. I know you specified commercial but just checking that you have been dealing with the residential or commercial departments with the bank?
Other reasons could be servicing / borrowing capacity. You can have oooodles of equity but if there is no evidence to service the debt and other personal expenses this could be restricting you.
If you would like to discuss further I'm always happy to help.
The trouble you are having is to do with the fact that it is mixed residential and commercial.
Can you please clarify the followings:
1) Is the title in your name or in a company name?
2) Is the commercial space larger than the total residential space above it?
I am happy to help you,
My phone number is 9897 9696 or 0414 545 643.
Due to many policy changes in the mortgage/lending environment in the past 12-18 months "ooodles of equity" is no longer a criteria lenders look at.Its used to be.Loan serviceability is now on top of the list of a myriad of factors to determine financing and refinancing capability.Commercial v residential lending also have different criteria and challenges in their own right. You need to discuss your situation with a broker or lender who has done mixed use property deals lately.
Best of luck,
Graham Doessel - CEO - MyCRA (Specialist Credit Repair) Lawyers (LPH)
Current Rating: 4.65 / 5
What the others have said above is partly correct, but like in any story, the devil is in the detail.
The areas I see that are likely to be impacting your borrowing power are including, but not limited to:
1.) Is the property owned by an individual/s or a business (or Pty Ltd, Trust, etc)?
2.) What is the zoning of the property?
3.) Do you (or the entity that owns the property) have demonstrable income sufficient to meet the lenders needs?
In addition to the basic questions above, have you formally applied for a mortgage already?
If so, have you applied for additional finance elsewhere?
If so, you may now have a low credit score due to too many credit enquiries in the last six or 12 months...
(one enquiry with the wrong lender can black list you, or just four enquiries in the past six, or six enquiries in the past 12 months and you can be out of the traditional lender game completely)
If your property is 'commercial' and owned by a Pty Ltd, your options just opened right up. BUT BE CAREFUL...
Make sure the broker you are dealing with fully understands your financing goals, and the reasons behind you doing what you are doing...
Make sure they ask lots of questions as they can't possibly understand your situation without asking LOTS of questions...
If you need a hand, click on my name to open my profile and call my offices, mention you need to speak to me and that we've chatted on Simply Ask it (my gatekeepers are excellent), and I'll happily point you in the right direction.
Either way, good luck and I hope my info helps you get your finances sorted :-)