There is a way for your client to have an investment with only 20% deposit
As you are probably aware, from the start of this year LVR restrictions have seen a decrease in the deposit required for an investment property from 40% to 35% of the purchase price. LVR is essentially the amount a bank is allowed (under Reserve Bank rules) to lend against the value or purchase price of a property. Although this is an improvement, pulling together a deposit of this size is still pretty tough.
Some data released from Core Logic last year, showed there were more investors in the market at 39% of all sales compared to first-home-buyers at 22% of all sales. It’s also becoming more common for buyers agents to work with groups of three or four people to buy a property together. When there are multiple incomes, banks tend to have more confidence that there will be no issues with meeting loan repayments, increasing their likelihood of being approved.
The good news story is that as a Loan Market adviser, I have exclusive access to two non-bank lenders who are able to lend to investors with a deposit of only 20% or equity equivalent in a property. I can work with your client to see if they meet the requirements for these lenders and assist them throughout the loan process explaining each step along the way and working with them to achieve their property goals.
If you would like any further information on how I can help, please don’t hesitate to contact me.