In order to take out an 85% investment loan, your loan application will likely be very highly favoured by most lenders if you have:
- An adequate deposit - Most lenders may want you to have a 15% deposit with at least 5% in genuine savings but some lenders may even consider a gift from your parents or a lump sum deposit.
- Stable employment - In order to convey a strong application, you’ll need to have a stable employment. This means you’ll need to have been in your current role for at least 3 to 6 months. A 2-years industry experience may be needed if you’ve changed jobs but you’re in the same industry.
- Adequate income - For any mortgage of over 80% of the property value, you’ll generally need to prove to the lender that you’re capable of affording the mortgage. This means you’ll need to prove you earn enough to meet the mortgage repayments.
- A clean credit history - If you have any records of defaults, judgments and bankruptcies in your credit file, most lenders may quickly reject your loan application. Missed repayments over the last 6 months or too many credit enquiries may also lower your chances of approval.
Also, investing in an unusual or non-traditional property type would turn away most lenders because they prefer standard investment properties, which are readily saleable (in case you’re unable to pay back the loan). For example, properties located outside of capital cities or major regional locations may be difficult to finance.
Cheers,
Otto