Thinking outside the square leads to finance approval
Investors facing difficulty obtaining finance should consider a mortgage broker to get the deal across the line.
When Smart Property Investment was looking to finance a dilapidated property in Sydney’s Cambridge Park for $236,000, it was denied finance on the grounds that the property was uninhabitable.
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But with the help of Aussie mortgage broker Ross Le Quesne, the finance was obtained using some unconventional strategies.
“We approached the lender with the deal, believing it would be relatively straightforward,” Mr Le Quesne said.
“The bank was happy to lend $180,000, which was 90 per cent of the land value, however we wanted to secure a 90 per cent lend against the contract price of $236,000,” he said.
“We finally managed to finance the full loan amount of $212,400 by making up the difference, which was $32,400, in a term deposit until the renovation was complete.”
This means that as soon as a more favorable valuation is achieved after the renovation, the cash deposit can be released.
Mr Le Quesne said there is a lesson to be learnt by other investors who may come up against similar issues when looking for a renovation project.
“If you can provide lenders with evidence of any past renovation success plus a scope of works for the current renovation, along with evidence of funds to complete the renovation, it may add to the success of the finance application,” he said.
For more information on how Smart Property Investment financed the purchase or to speak with Mr Le Quesne, be sure to attend the free Smart Property Investment ‘Investment in Action’ open house on Saturday, May 19 at Cambridge Park, Sydney.
Click here for full details on the open house and to RSVP your place – and potentially win a $15,000 prize pack.
