I WANT TO BUY A HOUSE IN THE COUNTRY, IS THAT DIFFERENT TO THE CITY?
WHY CAN'T I GET A 95% HOME LOAN IN A SMALL COUNTRY TOWN? - There are differences in the availability of loans for homes in the country when compared to loans for homes in cities or large towns. There is certainly no bias against country people, we know that they are the salt of the earth. However all home loans above 80% of the value of your home are usually mortgage insured. Without mortgage insurance many lenders won't be able to consider the loan under their lending policy. It is the mortgage insurers who take the risks in lending in Australia, not lenders.
One thing that mortgage insurers are worried about is their ability to sell a security property to recover the debt if there is a breakdown on repayments. They have found through past experience that their ability to recoup their money at an auction is questionable in areas of low populations where there may be little or no demand for a house that has to be sold quickly. Therefore they break down the various areas by postcode and set limits on loan sizes in areas deemed to be low population areas. That postcode list is constantly changing as population changes occur, but really it is always following change, not predicting it. Because of that we often get areas that have experienced a population boom and should qualify in a higher category, but don't because there are not yet any official figures reflecting the true population of that area.
I can only apologise to our clients who are unable to access the funds needed to purchase their home, but can't because they live in one of these areas. It is simple, but yet difficult to comprehend at the same time. I should state that larger country centres are not usually affected, and this only applies to a few but still important clients. We do use every means at our disposal to present an argument why they should bend the rules for you.
We also deal with a large number of lenders all with slightly different lending policies and agreements with mortgage insurers, so you increase your chance of getting the loan that you want and deserve just by using our services.
I WANT TO BUY ACREAGE, IS THAT DIFFICULT? - This depends on the zoning of the land and the size of the acreage. Most small acreage land is between 1 acre and 10 acres on land zoned "residential" or "rural residential" Those lots do not greatly worry lenders as long as normal services exist such as telephone and electricity. Town water and bitumen frontage are not crucial but it is desirable.
Once you get above 40 acres (16 Hectares) the number of lenders becomes limited, and once you get above 100 acres all lenders will question whether it is a residential lot or a small farm. Strangely it is easier to get finance for a residence than an income generating small farm.
The point really is if you are on one of these lots, or you wish to purchase a home on one, enquire with us first so that we can do some research for you. Each lender has a different lending policy for these loans so you really are better off with an experienced broker such as us.
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