High LVR (Loan to Value Ratio) investment lending, especially 97% investment loans, involves a number of risks. This may be why lenders generally require borrowers to meet strict criteria to be able to borrow.
Some of these criteria include:
- A 3-5% deposit: You may need to have have 3-5% of the purchase value saved as genuine savings. You may be able to find some lenders that will accept equity in another property as a deposit.
- Sufficient income: You may not need to earn a big income to qualify for a 97% investment mortgage but you will need to be able to afford the mortgage repayments as well as other commitments you may have, such as bills and existing debt, without any hardship.
- Strong employment history: You’ll need to have been in your current job for at least 6 to 12 months. However, this requirement may be mitigated if you have existing history in the same industry.
- Clean credit history: To make sure that your credit file is clear of black marks, make it a habit to pay your bills, rent, credit card repayments and other commitments on time over a period of 6 months. Too many credit enquiries may also damage your credit file.
- Little to no debt: Lenders generally prefer borrowers who don’t have a lot of debt so having multiple credit cards or personal loans may work against you when you apply for a 97% investment loan.
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