Hi. I’ve been living with my boyfriend in a rented apartment in Welpa for almost two years now. I’m working as a receptionist and I earn $36,000 a year, and my self-employed partner earns close to $58,000 a year.
We’ve been thinking of investing in a commercial property. We’ve not yet decided on what type of loan to take out but we’re currently looking into a lease doc loan. We know how much we can borrow so can anyone tell us a few things about this type of loan aside from that?
Explain a few things about a lease doc loan
- Otto Dargan
- Mortgage Specialist
- Posts: 7730
- Joined: Sat Sep 06, 2008 5:55 pm
- Location: Sydney, Australia
- Contact:
Re: Explain a few things about a lease doc loan
Hello Amber.
Welcome to the forums.
In most cases, major lenders do not tend to offer lease doc loans. If you want to take one out, you may need to seek out a second tier, non-bank, or a specialist lender.
The majority of lenders tend to be stricter on the types of properties that can be taken as security. The primary reason for this is because they have no guarantee that you have the capacity to make repayments using other income sources.
Your security property must also fulfil certain requirements in order to be acceptable. In most cases, your property must be:
Hope this covers the majority of your concerns.
Cheers,
Otto
Welcome to the forums.
In most cases, major lenders do not tend to offer lease doc loans. If you want to take one out, you may need to seek out a second tier, non-bank, or a specialist lender.
The majority of lenders tend to be stricter on the types of properties that can be taken as security. The primary reason for this is because they have no guarantee that you have the capacity to make repayments using other income sources.
Your security property must also fulfil certain requirements in order to be acceptable. In most cases, your property must be:
- A non-specialised commercial property like retail property, industrial property, an office or, a warehouse.
- Located in a major metropolitan area or a regional area.
- In a good and accessible location. However, few lenders may be able to come to a compromise for a lower Loan to Value Ratio (LVR) and loan amount.
Hope this covers the majority of your concerns.
Cheers,
Otto
Re: Explain a few things about a lease doc loan
Yeah it does, thanks. That doesn’t sound all too bad. Can you also tell us how we may be able to get the loan approved at a competitive interest rate?
FYI, although we’re getting the property for business purposes, we could also be living in the property itself. Hope this doesn’t make a difference.
FYI, although we’re getting the property for business purposes, we could also be living in the property itself. Hope this doesn’t make a difference.
- Otto Dargan
- Mortgage Specialist
- Posts: 7730
- Joined: Sat Sep 06, 2008 5:55 pm
- Location: Sydney, Australia
- Contact:
Re: Explain a few things about a lease doc loan
Hi Amber,
If you want to get your loan approved at a competitive interest rate then you may be able to do so by reducing your loan amount to 60% or less of the property value and saving up a larger deposit.
In many cases, if you have a large deposit then you may be able to get an interest rate below than the standard rates offered by many lenders. However, if you have a small deposit, low interest cover ratio, and your security property is not ideal, then you may have to pay a higher interest rate.
Please note that the purpose of your commercial property loan will affect how your loan is assessed. This means that if you are taking out the loan for investment purposes like buying or refinancing a commercial property that will be leased, then it is likely to be considered a low risk. However, owner occupancy is likely to be considered a medium risk.
You can find out more about all of this by browsing through our website. If you want to discuss your situation with one of our brokers then you can reach us directly on 1300 889 743 or fill in our free assessment form.
Cheers,
Otto
If you want to get your loan approved at a competitive interest rate then you may be able to do so by reducing your loan amount to 60% or less of the property value and saving up a larger deposit.
In many cases, if you have a large deposit then you may be able to get an interest rate below than the standard rates offered by many lenders. However, if you have a small deposit, low interest cover ratio, and your security property is not ideal, then you may have to pay a higher interest rate.
Please note that the purpose of your commercial property loan will affect how your loan is assessed. This means that if you are taking out the loan for investment purposes like buying or refinancing a commercial property that will be leased, then it is likely to be considered a low risk. However, owner occupancy is likely to be considered a medium risk.
You can find out more about all of this by browsing through our website. If you want to discuss your situation with one of our brokers then you can reach us directly on 1300 889 743 or fill in our free assessment form.
Cheers,
Otto
Re: Explain a few things about a lease doc loan
Aw, man! And here we were thinking owner occupancy wouldn’t make any difference at all. Doesn’t matter I guess… Thanks for all your help, Otto. We’re planning on giving you a call by the end of the week. In the meantime, we’ll be going through your website
Re: Explain a few things about a lease doc loan
Hi all,
I’m also planning on taking out a commercial property loan so I browsed through this thread to learn about lease doc loans. However, it’s seeming more and more likely that I’ll have to take out a no doc commercial loan instead. Can anyone give me a basic understanding of such a loan?
I’m also planning on taking out a commercial property loan so I browsed through this thread to learn about lease doc loans. However, it’s seeming more and more likely that I’ll have to take out a no doc commercial loan instead. Can anyone give me a basic understanding of such a loan?
- Otto Dargan
- Mortgage Specialist
- Posts: 7730
- Joined: Sat Sep 06, 2008 5:55 pm
- Location: Sydney, Australia
- Contact:
Re: Explain a few things about a lease doc loan
Hi dawnmason,
If you take out a no doc commercial loan then:
The pricing is variable-based on the lenders that you qualify with, your credit history, the percentage of the property value that you borrow, and the overall risk of your application.
You can have a look at our website or give us a call to learn more about no doc commercial loans.
Cheers,
Otto
If you take out a no doc commercial loan then:
- You may be able to borrow up to 65% of the property value.
- No income evidence is required.
- Investment properties such as offices, warehouses, factories, or retail properties in capital cities are preferred.
- You may be able to qualify even if you have a bad credit history.
The pricing is variable-based on the lenders that you qualify with, your credit history, the percentage of the property value that you borrow, and the overall risk of your application.
You can have a look at our website or give us a call to learn more about no doc commercial loans.
Cheers,
Otto
Re: Explain a few things about a lease doc loan
I see. Thanks for your help. I had a look at your website and I find it truly amazing. It’s very easy to understand and simple to browse through. I’ll be calling your office on Monday to schedule a meeting with one of your experts. Goodbye.