Specialist property home loans made easy!

Each lender has different policies when it comes to the types of properties they will accept.

The secret to getting approved is to find the right lender for the type of property that you’re buying!


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How can we help you?

We’re home loan approval experts, not just normal mortgage brokers.

So if you need to finance an unusual property such as a serviced apartment, company title unit, duplex, rural land or even a flood zoned property then we will know which lenders can help you.


What types of property can be financed?


What does a bank assess?

When banks consider a property as security for a loan, they are ultimately assessing the likelihood that they will lose money in the event that the property has to be sold to repay the debt.

The following are the main considerations that a bank takes into account.

Loan to Value Ratio (LVR)

The LVR is the amount you’re borrowing as a percentage of the value of the property.

Generally speaking, the higher the risk of the property, the lower the LVR you will be eligible for.

Often, you can borrow 100% for normal houses but may be restricted to borrowing as little as 70% LVR with certain unique properties.

In some cases, the only way to get approved is to either come up with a higher deposit or use a guarantor as a no deposit home loan soluation.

Saleability

Properties that have limited appeal to the general public may take longer to sell so they’re less desirable as security for a home loan.

Banks always want a property that can be sold quickly in the event that the loan cannot be repaid.

Stable value

If a property reduces in value significantly then the bank could make a loss if they had to sell the property to repay the loan.

Banks aren’t in it to make a capital gain from selling your property – they determine risk as if they were to sell the property today.

If the valuation points to poor performance for your property over the past few years, the bank will likely restrict your LVR.

Legal issues

Some property types such as company title units don’t have a normal certificate of title so there may be legal issues in the event that the bank has to sell the property to recover their loss.

When trying to get approved for home loan secured by an unusual property, our mortgage brokers always present a strong case to the lender.

We highlight your strengths of the property and you as the borrower.

By speaking in their language and providing additional supporting documents, we can often give them enough of a reason to bend their lending guidelines.


Do you have the address?

If you know the address of the property that you need to finance, our brokers can find out more information on that property and get back to you with the specific bank policy that is applicable.

We can search for the property address online and gather information from old sale listings including the limitations or possible problems from a lender’s point of view.

We can also contact the credit departments of several lenders which keep databases on specific properties of interest.

In particular, most large blocks of units (less than 50 units) are in at least one lender’s database.

We can ask them what their most recent credit decision was for an application submitted with one of the properties in that block as security.

This is a quick method we can use to find out if it’ss feasible for you to buy that particular property.


There are actually two types of valuations

There are two types of valuations that are used when valuing a property.

Which one is used will depend on the property and the discretion of the valuer.

In scope

The so-called PropertyPro template was developed by the Australian Property Institue (API) as a way for valuers to complete a valuation quicker based on set parameters.

Otherwise known as a short form or in scope valuation, it’s flexible enough to be used for most residential valuations.

Banks prefer short form because it’s a lot easier to read and they can quickly check off whether the property meets their lending criteria.

Making life easier for the banks means there’s more chance that your home loan will be approved.

Out-of-scope

Out-of-scope tend to be longer valuations because they take into account more characteristics about the property.

They also tend to be expensive and banks don’t like them because it means more work to ensure that they can accept it as per their lending policy.

Out-of-scope is common with commercial properties because a lot more has to be considered in the valuation such as the revenue potential of operating a business on the premises.

However, some residential properties have features and characteristics that are a little outside the square as well.


What methods are used when valuing?

Highest and best use

Due weight is given to the land’s potential of being used for other purposes other than residential.

This is based on current zoning and local council planning rules only and not any potential changes to these rules.

Like banks, valuers aren’t interested in speculative pricing as developers and investors are.

For example, if planning rules allow for the erection of buildings (think rural properties) or for certain commercial activities to be undertaken, the valuer will take this into account in their final valuation.

It’s particularly important for developers or investors considering “land banking” a vacant commercial lot to understand.

When comparing property sales, the valuer needs to compare properties that have similar highest and best use.

Once the highest and best use is identified, the valuer then needs to determine the most likely that a vendor and purchaser would recognise at the date of valuation:

  • The use must be legal.
  • The use must be within the realm of probability (it must be likely and not speculative).
  • The use must be the kind to come within the imagination of a particular purchaser.
  • The use should be economically feasible.

Market evidence and comparability

When comparing properties, valuers rely on actual sales, not properties that are currently on the market:

  • They consider properties with similar characteristics, quality and located in the same area.
  • The sales that took place would need to appeal to the same segment of the market for the property being valued.
  • Land use and potential utility should be similar.
  • Location should appeal to the same market.
  • Similar title and tenure.
  • Land topography, shape, slope and view can provide scope, or present difficulties, for development.
  • Similar amenities and services e.g. comparing a rural property which has town water to another that has access to town water.
  • The date of the transaction and the date of valuation should be close, with some adjustment applied as per the passing of time – a large adjustment for a large period of time would not be good evidence.

No two parcels of land are similar, therefore adjustments need to be made. There is no hard and fast rule.

However, the most reliable comparable sales are the ones that require the fewest and least complex adjustments.


Do you need our help?

Our staff have experience working for various bank and non-bank lenders and as a result know exactly what the banks are looking for when approving a loan. For this reason we often receive enquiries from people requiring finance for unusual properties. Please enquire online and one of our mortgage brokers can help you to find a loan for the property you are interested in buying.

  • M Stang

    I want to buy a duplex, is that allowed by the banks or do they have any reservations on such properties?

  • Hi there, not all lenders accept duplex or multiple units on one title as most of them accept only one property on one title. Having said that, there are lenders who can accept a duplex so going through the right one is key to getting approved.

  • E. Kelsall

    Hello. I want to borrow 95% LVR for an owner occupied property. I have full financials and am looking to borrow around $550k. The property is actually 4 units on one title & a bungalow out the back but I want to restore it back to one house. I’ve been declined by a bank already so I need help.

  • Hey E. Kelsall, we know a lender that has a 95% for 4 units on one title option in hteir policy. However, it’s likely that with the bungalow, it’s 5 units on one title! We need clarification as to it being either 4 units or 5 since this is a big deal. If lenders don’t budge then we may need to change the situation and drop your LVR a bit or go guarantor. Please speak with one of our expert mortgage brokers by calling 1300 889 743 to find out what can be the best way to proceed.

  • Gilruth

    I have a good income and I want to borrow 80% to buy a church which I’ll convert to a residential property afterwards. It’s a Cat 2 location so shouldn’t be a bit issue I guess.

  • We may need to check the zoning and see if it would be considered commercial, which would mean a non-conforming security. If you have a building contract in place to convert it to a house and it is fairly close to a house already then it can potentially be considered residential. Please enquire online for a full and free online assessment:
    https://www.homeloanexperts.com.au/free-quote/

  • Tim

    Hi, I would like to buy my first home through a 95% + LMI loan. I have $20,000 in shares and $5,000 cash but gen savings amount to only 4%.

  • Hi Tim,
    It would be best if you could save another 1% so you have 5% genuine savings. We have a few lenders in mind that can help you with the purchase so please discuss your situation in detail with one of our 97% home loan specialists on 1300 889 743.

  • wake

    Is there any way to borrow more than 80% for a small studio apartment unit?

  • Hi wake,
    Typically, most lenders may not accept unit sizes smaller than 50m2 and those that do may limit your borrowing power to 80% but there is an alternative way to borrow more. This is with a guarantor home loan. Because the lender has your parent’s property additional security, they can consider lending 100% of the purchase price.

  • Sandra Scholl-bullock

    i have found a lovely relocatable home can i get a home loan to purchase ? it is in nsw and about 4 years old

  • Hi Sandra,
    Relocatable home projects work well for people with either a large amount of cash or equity available. If you meet this criteria then we can help.
    The reason for this is that banks will not rely on the value of the house itself until it is complete and in the new location. So you need to fund it yourself using other security.

  • AJ

    I want to buy a property in Normanville SA 5204 and I need to borrow 90% to buy it. Can you tell me what the lenders will consider this location as and how that can affect my home loan application?

  • According to our postcode calculator, Normanville SA 5204 will be considered as a category 3 location. This means that it’s a medium to high risk location and you can borrow 90% though you may be required to be in a very strong financial position or meet other requirements such as buying a standard property. Do note though that a particular area or postcode may have different classifications for different lenders depending on their interpretation of the property market in that area.

  • Hensley

    I am interested in a 36sqm apartment (internal size only) so is it possible to borrow 95% to help with the purchase? I only have 5% deposit.

  • Hey Hensley
    Unfortunately, no. You’ll be restricted to borrowing 80% of the property value. However, you may be able to borrow up to 100% with the help of a guarantor. Check here for more info:
    https://www.homeloanexperts.com.au/property-types/inner-city-units/

  • Raz

    I want to buy vacant land with the help of a mortgage but I don’t have enough genuine savings. If I were to get a personal loan and then put this into a bank account for 3 months, would this count?

  • Unfortunately, no this wouldn’t count as genuine savings. Additionally, it will lower your credit score so you may have more trouble qualifying.