New investment property loan rules: who are the losers

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First home buyers buying an investment property will be big losers from bank policy changes

First home buyers buying an investment property for the benefits of rental income and negative gearing will be big losers from the new lending requirements

Why would first home buyers buy an investment property?

With prices already high in Sydney, which first home buyer can afford to purchase an owner occupied home to live in? Super rich? People who want to spend most of their income repaying their mortgage? As a first home buyer, regardless of if you are buying in Sydney or another place, it can make sense to buy a first home as an investment property. The rent helps to make the mortgage payments and negative gearing helps out at the start when there is a shortfall between the rent and the mortgage interest.

What makes it harder for FHB to borrow for an Investment property now?

With lending policies making it harder to get higher loan to value ratio loans for investment properties, now first home buyers buying an investment property must somehow find additional savings to put towards the deposit. However, in rising markets like Sydney and Melbourne, property prices are rising faster than many first home buyers can save for the deposit especially when a larger deposit is required.

So what is the answer for first home buyers taking out an investment property loan?

If the first home buyer has family that want to help and the family member has equity in their property a guarantor home loan may be a good option.
Find out about Guarantor home loans here:
Guarantor home loan

Others can still access higher loan to value ratio loans for investment properties.

Don’t have family that can help you out? Maybe you are not even a first home buyer?
Some lenders are still lending at higher loan to value ratios for investment property loans. The many banks may have cowered to the pressure of the APRA but other non-bank lenders are not regulated by APRA and are operating as usual for investors.
It will be these non-bank lenders that will benefit from APRA’s crackdown as investors seek new ways to invest with leverage.
Need a hand to sort through the maze of lenders and their ever complicated lending policies?
Oak Laurel has mortgage brokers many of Australia’s major cities (Sydney, Melbourne, Brisbane, Adelaide, Perth and more). Contact an Oak Laurel mortgage broker near you to find out what your borrowing options are in the new lending environment.
Mortgage broker in Adelaide

Mortgage broker in Brisbane

Mortgage broker in Melbourne

Mortgage broker in Perth

Mortgage broker in Sydney

Will these new bank rules stop price rises in the housing market?

No, this is not the prick that bursts a bubble. There is still plenty of demand for property in Australia both from locals and foreign investors. Property investors borrowing to buy property may get a little spooked when they walk into their local bank branch and get told ‘no’. However, smart investors will go to a good mortgage broker, like Oak Laurel, and find out that there are still lending options available.
The rules are not designed to stop gains in the property market. In fact they are in effect designed to keep the property market going strong. The measures are designed to ensure that major banks are not too heavily secured by investor loans. It will really give the non-bank lenders who are not regulated by APRA a selling point and introduce a bit more competition into the investment property loan market and home loan market more generally.

Oak Laurel Mortgage Brokers – Home loans made easy!

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Australian property market 2015 forecast

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Australian property market 2015 forecast: Good news for borrowers and real estate owners

The reserve bank of Australia may not have cut the cash rate today but another 0.25% rate cut before the end of the year appears likely if not inevitable. This is good news for borrowers and other factors also make for good news for property owners as prices set to continue to grow over coming years.

Why interest rates are likely to remain low or get lower in the near future

Considerations by the Reserve Bank of Australia in reviewing and setting the cash rate included:

• fluctuations in the economic conditions in Greece and China;
• below average growth in the Australian economy;
• inflation is forecast to remain consistent with the target over the next one to two years, even with a lower exchange rate;
• elevated but unchanged unemployment; and
• the need to depreciate the Australian dollar (higher interest rates encourages buy and appreciation of the Australian dollar)

It is reported that a cut to the cash rate at this stage may ‘spook’ consumer confidence. It is also likely that the reserve bank board knows that a cut is needed but would rather postpone it so that in future if more stimulus is needed there is still some rate left to cut.

Why real estate prices are likely grow

Real estate prices are linked to interest rates to a large extent as most people know. So the current (low) interest rates are already stimulating the housing market. If there is a further cut, which is likely, then this will stimulate the housing market even more!
But there are other factors that will compound price growth in the Australian property market. However, these are not as broad based as a rate cut.
Australia’s two largest cities have already had property price gains but now, according to SQM research, the amount of housing stock on the market  has plummeted. In Sydney, the housing stock on the market has dropped  15.7% compared to june last year and in Melbourne the housing stock on the market has dropped a massive 20.2% compared to this time last year! With less properties available for purchase buyers will need to fight harder (and pay more) for properties in these two markets.

Australian population growth is creating demand for housing

With Australia’s population growth one of the fastest in the developed world the demand for housing in on the increase. Sydney is Australia’s largest city, Melbourne is Australia’s second largest city and is forecast by the Australian Bureau of Statistics to grow at a faster rate and will become Australia’s biggest city (population wise). Large populated cities tend to have high demand and high property prices as more and more people compete to purchase. This is not new but since it is such a driving force in the property market it needs to be mentioned.

Massive investment from overseas investors in Australian property

In addition to migrants, investment from overseas buyers is helping the property market grow. China with millions of millionaires have become Australia’s largest foreign investors in Australian real estate and are forecast to invest billions more over the next seven years. Some of these will be immigrants or parents of immigrants others just investors. These property buyers are buying in Australia’s largest cities and tend to focus on areas where there are already a large number of Chinese residents. Glen and Mount Waverley in Melbourne are excellent examples of that. These suburbs are popular among Chinese buyers. This has led to Mount Waverley becoming Melbourne’s highest growth suburb. These and other Chinese hot spots are likely be growth hot spots into the future.
As mentioned by the Reserve Bank of Australia there are some economic woes in China with the Chinese stock market showing a crash of sorts in recent times. This will only serve as an incentive for more wealth Chinese to diversify their investment offshore and with their love of real estate and proximity to Australia, the market here is sure to benefit.

Impact of the Australian dollar on property prices

Another factor fueling the Australian property market is a cheap Australian dollar, which the Reserve Bank of Australia only wants to be cheaper. When the dollar is cheaper our exports become cheaper and we can sell more of them. But our properties also become comparatively cheaper and foreigners can afford to spend more and again pushing up prices.

Need to know how much you can borrow? Contact an Oak Laurel mortgage broker:

Mortgage broker in Adelaide

Mortgage broker in Brisbane

Mortgage broker in Melbourne

Mortgage broker in Perth

Mortgage broker in Sydney

Oak Laurel Mortgage Brokers – Home loans made easy!

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Median house price soars in Mt Waverley

Median house price soars in Mt Waverley

by REBECCA DI NUZZO

WAVERLEY’S STATUS AS A PROPERTY HOT SPOT HAS BEEN CONFIRMED WITH THE SUBURB RANKING AMONG MELBOURNE’S TOP 25 SURBURBS FOR THE BIGGEST GROWTH IN HOUSE PRICES.

The median house price shot up 18.1 per cent to $980,000 in the year to March, eclipsing neighbouring Glen Waverley, to establish Mt Waverley as Monash’s star performing suburb, according to a CoreLogic RPData report.

Glen Waverley’s median house price grew 13.8 per cent to $990,000 in the same 12-month period.

Jellis Craig Mt Waverley agent Stephen Huang said the area’s Chinese community, elite schools, public transport options and The Glen made both suburbs popular with overseas buyers.

But the quieter streetscapes of Mt Waverley had become a major drawcard for families.

“For a lot of new migrants this (Mt Waverley) is the first choice,” Mr Huang said.

Source: Herald Sun


Are you thinking to buy a property in Melbourne? Maybe you are looking in Melbourne's top top growth suburb Mount Waverley. Contact an Oak Laurel mortgage broker to find out your borrowing power.

Funding property development: property development loans tips

Funding property development: property development loans tips

Raising finance for property development

If done in a professional and organised way, property development can be very financially rewarding. However, there are also significant risk involved. If you need to raise finance for your property development project you will need to convince the lender that you know what you are doing and that their money will be safe if they loan it to you. Proper planning to the level appropriate to the complexity of the development will need to be demonstrated to the lender before they will approve your property development finance.

Funding a property development is riskier for lenders than a buy and hold (owner occupied or investment) property loan. Therefore the lender will be more cautious and have stricter assessment criteria. Once you have completed a number of successful property developments and can demonstrate that you know what you are doing, the banks and lenders will be more willing to lend you money. However, until you have built up a track record it is advisable to have an experienced team of professionals, including an experienced project manager.

Using a finance broker that specialises in property development finance will also make your finance application run smoothly. Oak Laurel has specialist finance brokers that know the different lender’s requirements and can guide your application through the process.

What do lenders expect in a development finance application?

When you are applying for development funding you will want to tailor your application to the lender(s) to which you are applying. Each lender has their criteria or conditions that need to be met before they will approve a property development finance application. This is not unlike other types of credit applications, however, the lenders view property development finance as investing in a business and that want to know that the business concept and profitability stack up and are worth the risk of their investment.

By putting together a quality finance submission in the form of a business plan or dossier for your project you will be demonstrating to the lender that you have considered all of the different aspects of the project and that the project is a low risk and profitable investment for them.

The process of putting together a business plan for your project that includes a detailed feasibility will also help you as a developer in making sure that you have considered all of the different aspects, identified problems and how to overcome them before your project starts. If in the end you can’t see a profitable project in the planning stage to there is no point for you to raise finance for property development or undertake the project unless something changes to make it worth doing.

What should be contained in your development finance application?

Your application should contain a summary about the project and its profitability but also contain a project feasibility which is the details of the project and of how you have come up with the numbers. For example if you are building a multi-unit development or multi-townhouse development, you will need to provide a break-down of the costs (where applicable) of acquiring the land; site-Related costs; building costs; professional fees and expenses; letting expenses (where the finished development will be let/rented to tenants); sale costs; legal costs and fees; planning and building regulation costs; cost of raising finance; holding costs; interest charges. You will also need to provide an estimate of the revenue from the sales. The values you are stating in your calculation should be estimated accurately, for example if you state that the finished development is a number of townhouses or units you should be able to demonstrate how you estimated the sale prices based on comparable sales.  

Property development valuation process

After assessing your application on paper, if the lender is still interested to proceed, the lender will require a valuation from a professional valuer. The valuer will go through your proposal and independently assess your project. If there are any issues like missing expenses or underestimates of the final sale prices, the valuer will identify them. This is where some poorly planned projects or projects with problems run into trouble.

Required property development profit margin

Often the financier will require the developer to demonstrate that a heathy profit martin will be obtained from the project. Typically, a profit margin of 15% or more of the total development cost (after all expenses including interest) will be required by the lender in order for the project to obtain finance.

Property development finance interest rates

Lenders generally do not publish their Property development finance interest rates. Instead these are negotiated between the lender and the developer or finance broker on the developer’s behalf. This is one area where a good finance broker can be a real asset to your development project. A good finance broker with experience in property development finance will be familiar with the interest rates, terms and conditions that lenders are offering and can often get a better package and your finance approved quicker than if the developer negotiates directly with the lender. This is particularly true if the developer has limited experience in financing developments the lenders may consider them an easy target.

Get your property development financed: Property development finance 

Find out about how to get your property development finance approved. 

See more about property development loan tips: Property development tips

Undertaking a small property development? May be a construction loan will be a better option. 

457 visa home loans up to 90% no LMI for Medicos

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Changes to lender policy means that more types of medicos on 457 visas can borrow up to 90% of the property value without Lenders Mortgage Insurance

The changes mean that more 457 visa medicos (doctors, vets, chiropractors, physiotherapists, medical specialists, dentists and optometrists) will be able to enter the property market earlier while saving the expense of lenders mortgage insurance on borrowing up to 90% of the property value.  The Lenders mortgage insurance waiver is a distinct advantage for medicos as lenders mortgage insurance  can amount to thousands of dollars.
The deal also gives a boost to regional areas as this is where many of the medicos (doctors, vets, chiropractors, physiotherapists, medical specialists, dentists and optometrists) who are on 457 visas are based.

Are you a medico on a 457 visa?

Find out more or contact us about the a medico home loan for 457 visa holders:
Home loans for medicos on 457 visas

On a 457 visa but not a medico?

457 visa holders can get home loans from Australian lenders however, if you are not a medico you will need to pay lenders mortgage insurance when you are borrowing more than 80% of the property value. Find out more about home loans for 457 visa holders here:
Home loans for 457 visa holders

Oak Laurel Mortgage Brokers – Home loans made easy!

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Chiropractors are you getting the cheapest home loan that you can get?

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Chiropractor mortgages: Chiropractors may not know that they could be eligible to get a cheaper home loan because of their profession

Eligible chiropractors can get cheaper home loans from some lenders because of their profession. This is because some lenders will offer special home loan deals for chiropractors to encourage them to be their customers.

What is so special about a chiropractor mortgage?

Chiropractors may be able to get home loan specials such as generous interest rate discounts or have lenders mortgage insurance requirements waived.
What this means for chiropractors is that they can use their preferred profession status with some banks and lenders tof pay less on their home loan or investment property loans.
However, not all banks and lenders offer special deals on home loans for chiropractors and the deals from those lenders that do offer specials are not equal. Furthermore, depending on how much you are borrowing and some other factors will mean that what you can get from each lender will change. This is where an Oak Laurel mortgage broker can help by comparing the different packages on offer for your situation.
So the real question is:

Chiropractors why haven’t you contacted us yet?

Contact us to compare the chiropractor mortgage specials available to you.
Chiropractors 

Which other professionals, who are not doctors, can get interest rate discounts and/or lenders mortgage insurance waived?

The following professionals may be eligible for interest rate discounts and/or lenders mortgage insurance waived:
Accountants 

Dentists 

Vets 

Doctors 

Optometrists 

Pharmacists 

Law professionals 

Energy, Mining and Resources professionals 

Oak Laurel Mortgage Brokers – Finance made easy!

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Can i get a loan on a 457 visa

Can i get a loan on a 457 visa

A common question that 457 visa holders ask when they come to Australia is "Can i get a loan on a 457 visa?".

The answer is yes, you can get a home loan whilst on a 457 visa!

Some lenders will approve home loans for 457 visa holders. However, this is not widely known even with the bank branch loan officers of the banks that do offer home loans for 457 visa holders.

So what is the solution? Contact Oak Laurel mortgage brokers. Oak Laurel mortgage brokers have a team of specialist lending experts that know the about the different options available for 457 visa holders, and most importantly, how to get the loan approved!

Avoid the disappointment of having your loan rejected use a mortgage broker like Oak Laurel that has a lending team that specialises in home loans for non-resident and temporary visa holders!

See more information about home loans for 457 visa holders here: Home loans for 457 visa holders