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Why can’t I find 90% investment loans anymore?

Posted: Thu May 28, 2015 4:05 pm
by Buckley
Hello home loan forum,

A year ago, I’d been wrestling with the thoughts of getting an investment loan and investing in this sweet property that I found. I didn’t have the money back then but now when things are looking up for me, I can’t find 90% investment loans anywhere!

I’m really stumped by why this is so. I haven’t been researching the market right now so I haven’t a clue. Can I still get a 90% investment loan somehow?

Re: Why can’t I find 90% investment loans anymore?

Posted: Fri May 29, 2015 9:01 am
by Otto Dargan
Hello Buckley.

Welcome to the forums.

Unfortunately, unlike a few months ago, borrowing 90% for an investment property is quite the hassle at the moment. That’s because many of the major banks have lowered the number of 90% investment loans they approve by quite a bit.

Fortunately, it’s not that you can’t find them, it’s that they’re very difficult to find, especially with banks. So you may still be able to borrow up to 90% through non-bank lenders but you’ll have to meet certain criteria for a better chance of approval.

Here’s a list of some requirements that you may need to meet:
  • Clean credit history - Most lenders won’t be willing to lend 90% to someone with a bad credit history. However, a select few may be able to overlook a blemish or two if you present a strong application.
  • Deposit - You need to have a 5% genuine savings deposit or one saved over a period of 3 to 6 months. Some lenders may even let you use the equity on an existing property or a gifted deposit in some cases.
  • Employment situation - You’ll need to have been in you current job for around 3 to 6 months.
  • Negative gearing - There are only a small number of lenders who have accept negative gearing, that too, only if you can prove a strong income.
  • Property type - If you’re planning on investing in an usual or a non-traditional type of property then your loan application may not be approved. This is because standard properties are more likely to be accepted.
Cheers,
Otto

Re: Why can’t I find 90% investment loans anymore?

Posted: Fri May 29, 2015 12:44 pm
by Buckley
Oh… okay. I’m pretty sure I can meet those requirements. The only problem right now is that 5% deposit, but I know that I can have it collected by the end of July. Until then, what else can I do to prepare myself, specifically, to help increase my borrowing power?

Re: Why can’t I find 90% investment loans anymore?

Posted: Fri May 29, 2015 4:43 pm
by Otto Dargan
Hi Buckley,

If you want to increase your borrowing power, you may consider:
  • Reducing the limits to your credit cards down to what you actually need. This is because credit cards are assessed on the basis of their maximum limit, even if you may not use it completely.
  • Applying for loans jointly with your spouse or partner. This can help increase your total assessable income.
  • Buying investment properties that are positively geared.
  • Researching and applying with a lender that takes a common sense approach to investors.
  • Fixing your interest rate for up to five years.
You can have a look at our Property Investor Centre to find accurate and updated information on the Australian property investment market. It includes a comprehensive list of resources with which you may learn more about investment loans and loan processes.

If you want more information, other than that on our website, you can talk with one of our experts directly by calling on 1300 889 743. You can also fill in our free assessment form and check if you qualify for a loan or not.

Cheers,
Otto

Re: Why can’t I find 90% investment loans anymore?

Posted: Sat May 30, 2015 7:43 am
by Buckley
Wow, that property investor centre of yours is extremely helpful. I’ve already recommended you guys and your website to my friends and colleagues. I’m not at all surprised to find that many of them already knew about you guys. I’ll continue checking out the website for now. Don’t know when exactly but I plan on calling you guys soon. Bye.

Re: Why can’t I find 90% investment loans anymore?

Posted: Sat Jun 20, 2015 11:36 am
by Furphy
Hi,

This thread helped me learn about the now rare 90% LVR investment loans. But the thing is, I’m more interested in getting a 100% investment loan, higher if possible. The way things are in the current loan industry, is this possible?

Re: Why can’t I find 90% investment loans anymore?

Posted: Mon Jun 22, 2015 9:20 am
by Otto Dargan
Hi Furphy,

Even if the current state of the loan industry may limit the amount of 90% or more than 90% LVR investment loans, you can still borrow up to 105%. However, the only way to do this would be with the help of a no deposit investment loan taken out with the help of a guarantor.

If your guarantor can guarantee to pay back a portion of the loan in case you can’t, you may be able to borrow up to 105%. Aside from having a guarantor, you must need to meet some additional criteria:
  • Your guarantor (parents or other relatives) must own a property in Australia which can be used as additional security for the loan.
  • You aren’t allowed to purchase more than one investment property. However, there may be an exception to this in some cases.
  • You must not have a lot of unsecured debts like credit cards although there may be some exceptions to this.
  • Your parents must be working or must be a self funded retiree. However, this may also have some exceptions.
With a guarantor, you won’t need to have genuine savings. If you want to find out more, give us a call or visit our website.

Cheers,
Otto

Re: Why can’t I find 90% investment loans anymore?

Posted: Tue Jun 23, 2015 10:04 am
by Furphy
Awesome. Thanks a lot for everything, Otto. I’ll give you guys a call by Friday. We’ve got a lot to discuss :)