There have been recent changes in investment policies, due to which borrowing 95% of the purchase price to buy an investment property is now available only through a handful of lenders.
You can invest in a property by borrowing with one of those lenders, however, you must meet some criteria such as:
- Your deposit: Most lenders require you to have saved 5% of the purchase price but some of our lenders will allow for your deposit to come from equity in another property, a personal loan or a gift from your parents or a close relative.
- Investment portfolio: Some lenders will only allow you to borrow 95% Loan to Value Ratio (LVR) if you have equity in another property. However, exceptions can be made.
- Negative gearing: Only some lenders take negative gearing benefits into account so you’ll need a strong income.
- Credit history: Your credit file should be clear of black marks including defaults, judgments, bankruptcy and too many credit enquiries.
- Employment: Being in your current job for 6 to 12 months is a requirement for most lenders but not for all of them.
- Your investment property: Lenders prefer standard properties in capital cities or major regional locations however some lenders can consider exceptions.
Cheers,
Otto