Browse Forums Home Finance 1 Dec 03, 2011 5:06 pm Does anyone know a good lender that can provide home loans for small apartments? The apartment that I would like to buy is about 44 m^2 and is currently under construction. I've spoken to several banks, and it seems each of their employees says something different. Speaking with 4 people at Commbank, 2 of them said that it's OK: any apartment with area more than 40 m^2 is treated like a normal home loan, another said it's on a case by case basis, and another said it's not possible to say without sending someone out to value it after completion. There was also similar confusion when I spoke to Westpac, but apparently they don't provide a home loan for such a small apartment. I also spoke with someone from Macquarie who said that this was OK with a 20% deposit (which I have) even if there were no walls between the bedroom and living room (which there is), but somehow I get the feeling that if I called again, someone else would say something completely contradictory. So could anyone point me to a lender that really do provide home loans for a 44 m^2 apartment as if it were a normal home loan, and whose employees would all say the same thing? I'm also curious if anyone has some insight into the bank's true policy on such an apartment, particularly Commbank, as their employees seem to be the most confused. Re: Getting a home loan for a small apartment 2Dec 03, 2011 6:01 pm The banks minimum used to be 50sq. I think they've reduced it to 40 now. I got an 80% loan with CBA. Others would only give 60%. I think your best bet would be to get a mortgage broker, that way he/she can get the deal at the best bank. Don't go around applying at different banks as you will ruin your credit rating. I would be very careful though buying a small apartment off the plan. You really need to know your end value. If it's lower than you paid (which it often is) there could be further problems. Check existing similar apartments in the area to see their value and compare. Re: Getting a home loan for a small apartment 3Dec 03, 2011 6:15 pm travelbug The banks minimum used to be 50sq. I think they've reduced it to 40 now. I got an 80% loan with CBA. Others would only give 60%. I think your best bet would be to get a mortgage broker, that way he/she can get the deal at the best bank. Don't go around applying at different banks as you will ruin your credit rating. I would be very careful though buying a small apartment off the plan. You really need to know your end value. If it's lower than you paid (which it often is) there could be further problems. Check existing similar apartments in the area to see their value and compare. I'm quite unfamiliar with how mortgage brokers work, but now that you've mentioned it, I'll look into it. How much do they cost? I haven't applied at any banks yet. I'm just asking around whether or not they do these types of loans. What do you mean I can ruin my credit rating by applying? Also, I have looked at the prices of other similar apartments in the area. They're usually a bit more expensive, around 340k compared to about 300k, but also slightly larger, about 55-60 m^2 instead of about 45 m^2. They're also not as new. Re: Getting a home loan for a small apartment 4Dec 03, 2011 9:54 pm Mortgage brokers don't charge. They make their commission from the bank. You could go to one of the big ones like Aussiehomeloans. The advantage is that they do all the legwork for you by comparing banks. They know each banks rules, rates etc. If you apply for loans at each bank it can cause a problem. When the bank does a search it looks like you've been applying for lots of loans so they don't know if any/all will be approved. Do NOT pay extra because it's new. The ones that you are comparing to (say 5 years old) will be the ones you will be competing with in 5 yrs. 55-60sq is a lot different to 40sq for the exact reason you are experiencing now. Due to borrowing issues when you sell the number of purchasers will be less than those for the 55-60sq ones. If you are planning on holding for a long time, not an issue I guess. I this to live in? What location (if you don't mind). Mine is VERY small. Inner Sydney. It's a rental. Re: Getting a home loan for a small apartment 5Dec 04, 2011 1:48 am travelbug Mortgage brokers don't charge. They make their commission from the bank. You could go to one of the big ones like Aussiehomeloans. The advantage is that they do all the legwork for you by comparing banks. They know each banks rules, rates etc. If you apply for loans at each bank it can cause a problem. When the bank does a search it looks like you've been applying for lots of loans so they don't know if any/all will be approved. Do NOT pay extra because it's new. The ones that you are comparing to (say 5 years old) will be the ones you will be competing with in 5 yrs. 55-60sq is a lot different to 40sq for the exact reason you are experiencing now. Due to borrowing issues when you sell the number of purchasers will be less than those for the 55-60sq ones. If you are planning on holding for a long time, not an issue I guess. I this to live in? What location (if you don't mind). Mine is VERY small. Inner Sydney. It's a rental. Thanks for the tip. I'll probably visit Aussie some time soon to see what they say. Also, it's not more expensive than older apartments, it's cheaper, but a bit smaller too. It's not in Sydney, it's in Canberra and I intend to live in it. Re: Getting a home loan for a small apartment 6Dec 04, 2011 9:47 am We've bought one just under 40m2 and wife works for the bank so they have different rules for % loaned. But we bought at a price that even the valuer said was crazy, then did a reno. Where we do come unstuck a bit though is that because it's classed as inner city the bank tends to value these much lower which plays around with our overall equity position. 40m2 you should be fine, but as you've mentioned it's hard to get the correct info from your bank. Watch out for body corporate fees aswell, the more pools, elevators, outdoor living involved in new developments the bigger the fees. So if you're looking to rent out as an investment you may be $4k+ out of pocket a year as a start. Re: Getting a home loan for a small apartment 7Dec 04, 2011 6:45 pm Hi, Does that squ meter includes car space or balcony? If it's >40 then 80% LVR is fine- but at 80% LVR ( loan to debt ratio) you need to have good/strong employment...if you have a tarnished employment record or credit file then lower the LVR the better. LVR updated as of Nov 2011- http://www.shapehomeloans.com.au/blog/p ... 2011060635 If your concern; you can apply for conditional pre-approval subject to "valuation only" even if it's OTP ( off the plan)' that way instead of "worrying" abt the size of the place...you know from day 1 the lender knows what they are financing and all you need to worry abt is the "valuation value" instead of the security type. Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au The biggest challenge will be if you take out a loan and then run out of money - you'll have an incomplete security and lenders do not like this so you can get stuck.… 2 19114 How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 11933 The Soil classification has little to do with piers. The purpose of the classing of the soil is to identify the clay content and the "average expected range of movement… 2 9863 |