17 Nov 2022

Will Mortgage House Accept Serviced Apartments as Security for a Mortgage Loan?

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Potential borrowers who are researching and comparing mortgage loan types may wonder what types of security Mortgage House accepts. Mortgage House does accept serviced apartments as security for a mortgage loan, however, there are some restrictions:

  • The borrower must apply for a full-document mortgage loan
  • The borrower loan-to-value ratio (LVR) is restricted to a maximum of 70%, however, an LVR of 80% may be considered if multiple standard properties are placed as security
  • For a metro location, the borrower’s loan size is restricted to $1,200,000
  • For a non-metro location, the borrower’s loan size is restricted to $900,000
  • The apartment units are required to have a minimum living area of 50 square meters
  • The properties valuation report is required to be completed on a vacant possession basis
  • The properties valuation report is required to incorporate sales evidence from outside the development
  • The borrower is required to have a strong asset position and successfully demonstrate that they own more than 20% equity in other types of real estate
  • First-time property buyers are not approved 
  • The borrower is required to have a reliable income stream and be able to fund mortgage repayments without heavily relying on income generated from rental properties
  • The borrower is required to have a clear credit history
  • The lease agreement is required to be provided and must include provisions for the borrower to void a lease should the tenant fail to pay, or goes into liquidation where the borrower must be granted full access to the apartment in question
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