Are you a low deposit investor?

November 25, 2013 at 2:08 PM

Stuart Duncan from Apex Group offering advice for those investors who lack the equity and deposit currently to buy again.

Are You a Low Deposit Investor? 

If so, you have more finance options than you think!

With the Reserve Bank’s recent move to limit low deposit lending, some investors have been unable to fund the next investment property purchase because of a perceived lack of equity. If you are in that position, there are some finance options that you should consider before flagging away that great deal. Have you considered these?

·         Renovation and revaluation of your existing security properties (your own home and/or rentals). This doesn’t have to cost a lot, but even paint can make a surprising difference to the look, and therefore the value of a property.

·         Reducing property secured debt by taking out a low interest credit card (or two) to fill a small short term equity gap. This is a short term strategy, with the aim of revaluing in 6-12 months and repaying the credit cards.

·         Using a specialist non-bank lender, who is not subject to the low deposit rules

·         Borrowing s funds privately (eg: from parents or other wealthy family members) to increase your deposit. Remember to document all of these loans via a solicitor for the protection of all parties

·         Bring an equity partner into the transaction (Again, make sure the rights, obligations and liabilities of the partners are properly documented by a solicitor at the outset)

·         Talk to your mortgage broker about obtaining finance from your existing bank. In limited circumstances and for existing customers only, the trading banks are now considering over 80% transactions again!

To discuss the suitability of any of these options for your particular situation, give me a call on 0275 223715 or email stuartd@apexgroup.co.nz

 

 



Tags: Property Investment Mortgage financing LVR Low Deposit
Category: Buying an investment property

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