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  1. #1

    Default Renting out the property bought with less Equity? >20% of House value

    Hi Guys, Is there any rule that a Home owner who purchased house with less deposit (10%) of purchase price cannot Rent the property completely till their Equity share reaches 20% of the property value. I heard this from a friend who mentioned, getting income from rents is nothing but an Investment property or investors will do and you got to pay 40% to banks as a deposit for that.When you're buying a house with an intention to live there then it's not an investment property 10% & above deposit should be enough.

    Could any one please explain me if this rule is true, my mortgage broker never explained me this and he knows that my intention to buy first home to Rent it out.

  2. #2
    Join Date
    Mar 2012
    Posts
    125

    Default

    Quote Originally Posted by rmalapati View Post
    Hi Guys, Is there any rule that a Home owner who purchased house with less deposit (10%) of purchase price cannot Rent the property completely till their Equity share reaches 20% of the property value. I heard this from a friend who mentioned, getting income from rents is nothing but an Investment property or investors will do and you got to pay 40% to banks as a deposit for that.When you're buying a house with an intention to live there then it's not an investment property 10% & above deposit should be enough.

    Could any one please explain me if this rule is true, my mortgage broker never explained me this and he knows that my intention to buy first home to Rent it out.
    Think this is more an LVR rule the banks have to use as wheter to lend or not. Forgot it was as high as 40% thought it was at 20%...

  3. #3
    Join Date
    Mar 2008
    Location
    Auckland Wide
    Posts
    1,239

    Default

    You can buy a home with 10% if you intend to live in it. If your situation changes and you cant afford to live in it then I am sure nobody would object to you renting it out so that you are able meet your financial commitments. Nobody will ask you for extra deposit.

    If your intention is to rent it out then the rules are pretty clear, you will need 35% deposit. Unless it is a new build.
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  4. #4

    Default

    even this latest scheme for 1st home buyers allows for flatmates!


 

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