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Thread: Am I dreaming?

  1. #1
    Join Date
    Mar 2013
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    Auckland
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    Default Am I dreaming?

    I want to buy another property, (provincial NZ) through my LTC, with a new bank. It will be cashflow positive. Looking at spending $200-250K.

    However, I would want the loan to stand on its own merits: I wouldn't want the bank to look too closely at my income/commitments as my income fluctuates. It's not your week-in, week-out, 9-5 salary/wages, so a big chunk of it isn't guaranteed and the other portion is only guaranteed for the next ten months (when a new contract will be signed.) Current earnings also only date back a month or so.

    So are there any lenders out there who will just look at the loan as self-servicing without examining guarantors' income?
    My blog. From personal experience.
    http://statehousinginnz.wordpress.com/

  2. #2
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    Default

    I don't think you'll find any lenders that won't ask to see your income, but there are always options for part-employed or self-employed (or even unemployed) borrowers. Book some time with a lending person at a bank and have a discussion. If the main street banks won't do it for you, Resimac probably will - though you'll pay a bit more for it.
    AAT Accounting Services - Property Specialist Accounting - AATAccounting.co.nz
    Lower fees for investors, traders & real estate agents!
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  3. #3
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    Default

    Get your broker to go to the non banks. They'll lend it's just the interest rate will be higher.

  4. #4

    Default

    Depends on your relationship with the bank.
    My income fluctuates too as I have a business that relies on commercial and industrial buildings being built and/or refurbished so the income varies from month to month.
    I have recently purchased a property where the bank wanted a valuation done and I simply asked them to finance me based on the current rental income and they agreed.
    Shop around if you current bank will not play ball, and by all means negotiate.
    Cheers,
    Brian

  5. #5
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    Quote Originally Posted by Kirwee View Post
    Depends on your relationship with the bank.
    My income fluctuates too as I have a business that relies on commercial and industrial buildings being built and/or refurbished so the income varies from month to month.
    I have recently purchased a property where the bank wanted a valuation done and I simply asked them to finance me based on the current rental income and they agreed.
    Shop around if you current bank will not play ball, and by all means negotiate.
    Cheers,
    Brian
    The whole problem is that I don't want to go with my current bank so as to avoid more cross-collateralisation. My current bank would probably go for it but I want to work towards releasing my own home from the mix.
    My blog. From personal experience.
    http://statehousinginnz.wordpress.com/

  6. #6
    Join Date
    May 2012
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    Default

    Any scope in using your current bank for the new property, and then re-financing your PPOR to a new bank? Could work if the PPOR loan was smaller than the $200-250k rental you're planning to buy. Assumes that you don't need to use the equity in your PPOR for the lending (but since you're talking about another bank already, that seems likely?).

  7. #7
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    Default

    Quote Originally Posted by Lanthanide View Post
    Any scope in using your current bank for the new property, and then re-financing your PPOR to a new bank? Could work if the PPOR loan was smaller than the $200-250k rental you're planning to buy. Assumes that you don't need to use the equity in your PPOR for the lending (but since you're talking about another bank already, that seems likely?).
    No - the current bank won't be able to do that as it would leave the existing rental (in Auckland) at over 90% LVR. So while the equity in my home would not be used for a new purchase, it is currently being used that way.
    My blog. From personal experience.
    http://statehousinginnz.wordpress.com/

  8. #8
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    Oct 2013
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    The simple answer seems to be to go with the current bank, and refinance your PPOR away as soon as possible. Is there a reason that won't work?
    AAT Accounting Services - Property Specialist Accounting - AATAccounting.co.nz
    Lower fees for investors, traders & real estate agents!
    [email protected] for more information.

  9. #9

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    Ditto what Anthony said.

  10. #10
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    Quote Originally Posted by Anthonyacat View Post
    The simple answer seems to be to go with the current bank, and refinance your PPOR away as soon as possible. Is there a reason that won't work?
    Yeah, there is. And apart from the other reason (that I don't want to go into), in the meantime I would be doing what I am trying to avoid (more cross-collaterising against my home) for quite a while as I paid down the existing rental to the 70% equity mark. It's currently over 90% as I bought it with 100% financing against my home and have had it on interest only.
    My blog. From personal experience.
    http://statehousinginnz.wordpress.com/


 

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