Should I buy a new build or existing investment property? From the mortgage/Finance perspective:
Please kindly note this below information is provided by Pathfinder Mortgage Services. Feel free to contact Paul Lin or Holly Tang if you have any questions regarding your mortgage, they are really helpful!
Please note that this information is subject to change on banks’ policy. And for the detailed information, please discuss further with your banker or mortgage broker.
Purchasing a new build for investment:
New build includes Turn-Key (Land and House package) and Construction properties (build your own investment property).
At least 20% deposit required.
Registered valuation report is required for new build properties as there is no market value available in system.
ANZ currently is offering Blueprint to Build floating rate discount, which is a discount of 2.76% p.a. applied to ANZ home loan floating interest rate (this rate is usually lower than the fixed interest rates). Discount is available for 2 years. (no cash contribution if you are not first home buyers). ANZ may stop this discount at any time.
Construction loan is approved differently from Turn-Key and existing properties. Extra building costs for contingency to be considered when calculating the lending amount, which will result in less lending approved when servicing is tight. Loan for the construction part will be drawdown progressively as invoices coming through.
Risks to be considered: If the construction cannot be finished within the loan approval period, the Bank need to reassess the application. If clients’ financial situation or bank policy changed, the Bank may not be able to reapprove as much lending as previous approval.
Purchasing an existing home for investment:
At least 40% deposit required.
If the Bank can accept purchase price or the market value from their system, registered valuation report is not required.
Before purchase:
- Check if LIM and Title are ok.
- Check if EQC damages all repaired
- Check if it is potentially leaky: high risk of leaking was mostly built between the late 1980s and the mid-2000s, using plaster-style monolithic cladding systems.
- Check if happy with the builders’ report