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  • Personal loan question

    Hi folks

    I have been advised by my banker today that our lending application is declined.
    My wife and I have two properties, one is a rental.
    Our total loan is about 70%, I asked another small loan ($10K-$20K) on the top of current mortgage, so we could start a do-up for our own house. However, the banker said based on the LVR rule, we can't borrow the money any more.
    At the moment, I work full time and my wife is taking a unpaid leave until March next year.
    Is there any way that we could convince bank for this new lending?

    thanks in advance.

  • #2
    Originally posted by johnnyandtina View Post
    Hi folks

    I have been advised by my banker today that our lending application is declined.
    My wife and I have two properties, one is a rental.
    Our total loan is about 70%, I asked another small loan ($10K-$20K) on the top of current mortgage, so we could start a do-up for our own house. However, the banker said based on the LVR rule, we can't borrow the money any more.
    At the moment, I work full time and my wife is taking a unpaid leave until March next year.
    Is there any way that we could convince bank for this new lending?

    thanks in advance.
    You should be able to get 80% finance on your own home, 60% on the rental. Beyond that, there are fewer options.

    You could try a personal loan, as your thread title suggests, but they're higher interest rates.

    You could spend the money on a credit card or borrow from family, and when the house is 'done up' get it revalued and added to the mortgage then.
    AAT Accounting Services - Property Specialist - [email protected]
    Fixed price fees and quick knowledgeable service for property investors & traders!

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    • #3
      Non bank lenders eg Resimac, have different LVR rules and are picking up a lot of business these days. A mortgage broker will help.

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      • #4
        It seems that tighten LVR rule declined our application.
        There are few options that I could think about
        1. cash out from Credit cards
        2. ask for personal loan from the bank
        3. Borrow a loan via P2P.

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        • #5
          Hi Johnny this is a situation we come across all the time.

          If you have a vehicle or other identifiable asset of equal value that is freehold you can borrow against that, with good credit and affordability you would be looking at 9%+.

          If you do not we would put a client through Dorchester or Avanti and have a caveat over their property. I had a client recently who wanted $25k for a home heating system and we got him approved at 10.5% with a caveat over his property.
          Finance Broker - www.creditone.co.nz

          Comment


          • #6
            Originally posted by johnnyandtina View Post
            Hi folks

            I have been advised by my banker today that our lending application is declined.
            My wife and I have two properties, one is a rental.
            Our total loan is about 70%, I asked another small loan ($10K-$20K) on the top of current mortgage, so we could start a do-up for our own house. However, the banker said based on the LVR rule, we can't borrow the money any more.
            At the moment, I work full time and my wife is taking a unpaid leave until March next year.
            Is there any way that we could convince bank for this new lending?

            thanks in advance.
            Hi,

            You are going to hate me for saying this, but should you be borrowing this extra money?

            The bank has said no for a reason, and most likely they consider that you don't have the income to make the payments long term.

            The best way to get ahead financially is to get a debt free personal home and to avoid other debts types, such as credit cards. Can you delay the improvements until you have saved up enough money to pay for them?

            Ross
            Book a free chat here
            Ross Barnett - Property Accountant

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            • #7
              Tend to agree. How about you save the $10-20K and pay cash if it is really important?
              Free online Property Investment Course from iFindProperty, a residential investment property agency.

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