The post Good investment loans easy to find in Australia appeared first on Oak Laurel.

Whoever said that it was hard or expensive to get an investment loan must have been looking for one in their own navel. Many lenders are still actively competing for investors as they have not exceeded the Government Banking Regulator’s 10% investment lending growth ‘speed limit’.

Many lenders are still offering loans to investors at higher loan to value ratios and competitive interest rates. The major banks who have exceeded the Government Regulator’s investor growth limit are getting out of investment loans and some are now spruiking that the investment market is dead.  This smacks of If I can’t play I will close my eyes and shout that the property market over. But with so much demand for property in Australia’s two largest cities, Sydney and Melbourne, no one wants to hesitate only to have to pay thousands more for a comparable property next week. Anyone who has attended an Auction in Sydney or Melbourne recently knows that the demand is stronger than ever as are prices.

Here is the tip to getting a good investment loan. Don’t bother going into a bank branch. Don’t bother going to a mortgage broker that is owned by a bank. These places don’t give you a lot of choice even if you are not an investor. Go to an independently owned mortgage broker who has access to a wide range of lenders including non-bank lenders. You will find out that there is plenty on offer for property investors with competitive loan packages to boot. Find more info about what kinds of investment loans are still available here: investment loans

Now that the big banks are out of investment lending they have started talking down the property market prospects, it does not even matter that the data says the opposite. There may be an affordability issue in Sydney but the Melbourne market median house prices are around $200,000 cheaper than Sydney and are just starting to really take off. The most recent property price growth data shows that Melbourne has overtaking Sydney as the fastest price growth city and prices are growing even faster than before. The big banks may be disappointed that they can’t lend to investors in this growing market but this will just give the lesser known lender a chance to show off their investor loans expand their investor market share. These new Government Regulator measure are levelling the playing field for lenders and introducing more competition that is long overdue.

 By Dr Nigel Abery (PhD) 

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The post Federal Government Treasurer’s new measures for illegal foreign property purchases appeared first on Oak Laurel.

Australian Federal Government Treasurer Joe Hockey announces proposed new measures to crackdown on illegal foreign property purchases.

Today 8 August 2015, Joe Hockey Federal Government Treasurer, announced that the law will be changed so that foreign investors breaking the law and purchasing established properties (instead of new properties) will be forced to forfeit capital gains on the property and will be fined 25% of the purchase price or 25% of the property value. Temporary residents can still purchase existing properties to live in whilst they are residing in Australia so long as they sell the property if they permanently depart Australia.

There is currently a moratorium on criminal charges for foreign investors self reporting that they have broken the rules. However, those that have broken the rules will still be required to sell the properties.

It has been reported that 400 Australian properties are under investigation for being illegally purchased by foreigners. However, it is acknowledged that the vast majority of (Chinese) foreign property investors are complying with the Foreign Investment Rules.

The rules on foreigners purchasing Australian property are quite simple and easy to comply with. Non-residents must obtain approval from the Foreign Investment Review Board (FIRB) and generally can only purchase new properties. If they are a temporary resident they may be able to purchase an existing property to live in whilst that reside in Australia. The Foreign Investment Review Board may grant permission to purchase existing property for the purpose of redevelopment to increase the supply of property. However, it is unlikely that the existing property will be able to be rented out / leased whilst it is waiting to be re-developed.

The Government has already announced that it is introducing a new fee/tax for foreigners applying to purchase property in Australia. However, this is not expected to reduce demand from foreigners for Australian property.

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The post Australian property price gains remain strong – Aug 2015 appeared first on Oak Laurel.

Australian property capital gains remain strong in Sydney and Melbourne – Aug 2015

Despite bubble talk from some media commentators the property price gains remain strong in Sydney and more so Melbourne – Aug 2015. If you were waiting for housing prices to drop in Sydney or Melbourne the latest data shows that it looks like you may have made the wrong decision. Demand for property in Australia’s largest and future largest cities remains strong. House price data from Corelogic PRData  monthly values – 31 July 2015 shows that “% Change Month on Month” unit prices were up by 3.23% in Sydney and up by 3.18% in Melbourne. Furthermore, house prices were up 3.32% in Sydney and up 5.12% in Melbourne, month on month. Rather than being dampened, surprisingly the data shows that property price gains in Sydney and more so Melbourne appear to be gaining speed. Melbourne price growth looks to be starting to catch up with Sydney’s.

Auction clearance rates over the last week (25 Jul – 1 Aug 2015) in Australia’s two largest cities show a similar picture with both Sydney and Melbourne having clearance rates at 79% according to the APM Market Reports on Real Estate listing site domain.com.au.

What about the changes some banks have made reducing maximum loan to value ratios for investors?

The changes in bank lending for investors does not appear to have had a dampening impact on property prices. There are still lenders that are providing 95% LVR investment loans and competitive interest rate, fees and feature packages. Furthermore, if you have equity from the already owned property price gains then you probably don’t need a higher LVR.

What about the interest rate rises for investors that some banks have made?

So far the interest rate rises that have been made by some banks have been modest. Investors must find the increase in interest rate insignificant compared to the capital gains that are being seen in Sydney and Melbourne. I wonder how much interest rates need to rise by before the current rate of capital gains becomes unattractive? Furthermore, there are still lenders out there that are under the Government Banking Regulator’s (the Australian Prudential Regulatory Authority – APRA) ‘magic number’ of 10% maximum allowed growth in investment lending and are more than happy to lend to investors. Investors can still get interest only investment loans in the low four percent range and even when borrowing over $1million. Note, you will need to meet the lender’s eligibility criteria. This information is correct at time of writing, the market is in a constant state of change. Check with us if in doubt.

What is the major limitation on borrowing now?

As previously mentioned the big losers from the new bank measures are first home buyers that want to enter the property market by buying an investment property. If you are a First home buyer looking to enter the property market as an investor to take advantage of the rent and negative gearing to help with the payments you may be interest in a guarantor home loan.

If you already own well located property in Sydney or Melbourne that was purchased some time ago you probably have access to some equity in your property. This equity can be used for a deposit on an investment property.

The major limitation on borrowing is then your borrowing capacity. The Government Regulator crackdown also included getting some banks to tighten up their borrowing capacity calculators and policy to make it more difficult to demonstrate your ability to make repayments if interest rates rise. The some banks have now changed how they consider rental income, living allowance and other some aspects in considering your ability to repay a loan. Want to maximise your borrowing power? Ask you what you can do and how you can do it, when you enquire with one of our mortgage brokers for a mortgage.

What is the solution for investors looking to borrow?

Looking to borrow to invest in the Sydney, Melbourne or other property markets? Ask one of our mortgage brokers about getting an investment loan with flexible borrowing capacity requirements, access to higher LVRs and competitive interest rate, fee and feature package. Note: this information is correct at time of writing, the market is in a constant state of change. Check with us if in doubt.

Contact one of our local mortgage brokers to go through your options.

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The post Home construction loans: how do construction loans work appeared first on Oak Laurel.

Construction loans

Building your dream home can be an exciting experience. Taking an idea and turning it into reality can be a rewarding experience if done right. When you build your own home you can decide how you want it to be.

It is not always trouble free. Constructing a home can be a long and expensive process and there are many possibilities that things can go wrong.

If you are borrowing money for the construction of the home then the lender is also taking on the risk that something will go wrong. The major risk is what the finish building will be worth. Some of the other risks include the quality of the builder. If the builder does not finish the building it can be very difficult to sell an unfinished home without providing a significant discount on the price. Even if the builder does finish the home, if the quality of the finished home is poor then the value may be less than expected.

Lenders don’t like taking on a lot of risk and will put in measures / requirement to reduce this risk. In the case of lending to build a home some lenders offer home construction loans, with all their strict criteria, specifically for this purpose.

Typically, a qualified and licenced builder must be engaged. Furthermore, the lender will want you to have a fixed price contract (not a cost plus) with the builder so the lender knows exactly how much it will cost to finish the building. Owner builder construction loans are available but generally only for builders who are building their own property. This means that you may have an especially hard time finding an institution to finance your project if you are intending to be an owner builder.

Having a fixed price with a licenced builder is only one of the many requirements of getting a construction loan.

Did you know that some lenders will allow you to use a construction loan for a three or even four units/townhouses development? If you are undertaking a small development contact us to go through your options.

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95% Investment property loans; 90% LVR Investment loans: What is the maximum loan to value ratio for investment property loans – July 2015

NOTE: Bank policy is now in a state of change this information is only valid at the time of writing 29 July 2015.

Bank policy has been changing recently. Some banks have stopped lending to investors. Others banks have reduced their loan to value ratios available on investment property lending and or increased their interest rates for investment property lending. There has also been changes to the serviceability calculators used by banks and lenders that reduce borrowing power in many cases.

We have been getting inquiries from property investors asking:

“Is it still possible to get investment property loans at 90% loan to value ratios (LVR / LTV)?”;

“Can I get an investment property loan with 10 percent down?”

“I have bought ‘off the plan’ can I still get a higher loan to value ratio investment loan?”

“What is the maximum investment property loan to value ratio available now”

“Will I need to pay much higher rates on an investment property loan now?”

Whilst many lenders have changed their policies other lenders have not, well at least not yet.

Contact an Oak Laurel mortgage broker

Don’t delay act NOW!

+614 30129662

Oak Laurel Mortgage Brokers – Investment property loans made easy!

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Find out about the new property investment winners and losers.