{"id":1209,"date":"2024-03-11T03:13:17","date_gmt":"2024-03-11T03:13:17","guid":{"rendered":"https:\/\/bestprofessionalfinance.com.au\/?p=1209"},"modified":"2024-03-11T07:22:02","modified_gmt":"2024-03-11T07:22:02","slug":"property-types-you-should-be-wary-when-planning-to-get-a-home-loan","status":"publish","type":"post","link":"https:\/\/bestprofessionalfinance.com.au\/property-types-you-should-be-wary-when-planning-to-get-a-home-loan\/","title":{"rendered":"Property Types You Should Be Wary When Planning To Get A Home Loan"},"content":{"rendered":"

When it comes to securing a loan for a property, not all homes are created equal. Lenders have specific criteria for accepting properties as security whether it’s a residential home or an investment property, and certain types might make them hesitate. <\/span>\u00a0<\/span><\/p>\n

As you know lenders in Australia have their own rules for giving out home loans. One big part of these rules is to make sure they are not taking too much risk when they approve a loan. In simpler terms, lenders only want to give loans to people who can pay them back, even if things get tough in the property market. This also means the property itself should be strong and not too risky.\u00a0<\/span>\u00a0<\/span><\/p>\n

By understanding these distinctions, you can adjust your property search to steer clear away on\u00a0<\/span>\u00a0<\/span><\/p>\n

In this blog post, we’ll explore some unique property characteristics that could raise red flags for lenders and why they might hesitate to accept them as security.<\/span><\/p>\n

    \n
  1. Small studios and apartments: Less than 40 m2 Size<\/span><\/b>
    \nSmall studios, measuring less than <\/span>40 square meters <\/span><\/b>(excluding balconies or parking spaces), face challenges in gaining approval from lenders.<\/span>
    \n<\/span>The reason is primarily due to the limited marketability of these compact apartments, which poses a significant hurdle. Despite the growing trend of minimalist living, the appeal of such small spaces is mostly confined to single individuals, particularly when lacking separate sleeping quarters. Additionally, the potential for renovation or improvement is minimal.
    \n<\/span>In the unfortunate event of a loan default, the lender’s ability to recover costs is hindered by the restricted pool of potential buyers. This makes small studios\/apartments a risky proposition from the lender’s perspective, as selling such properties becomes a challenging task.<\/li>\n
  2. High Voltage Proximity<\/span><\/b>
    \n<\/span>Properties situated near high-voltage power lines may encounter resistance from lenders, and the same holds for those near telephone poles and wind turbines. Some lenders establish a requirement that power lines should be more than 50 meters from the property boundary <\/span><\/b>due to safety concerns and potential health risks associated with prolonged exposure to electromagnetic fields, which could explain their apprehension.
    \n<\/span><\/span><\/span><\/li>\n
  3. Non-compliant Pool Areas<\/span><\/b>
    \n<\/span>While a swimming pool can be an attractive feature, a non-compliant pool may serve as a deal-breaker for lenders. Compliance with safety standards is crucial to ensure the well-being of occupants and visitors, and failure to meet these standards can impact the overall value of the property. It is advisable to work towards rectifying compliance issues before seeking a loan. Alternatively, exploring financing options that accommodate such features may be necessary to address lender concerns.<\/li>\n
  4. Geological issues<\/span><\/b>
    \n<\/span>Properties with geological issues pose a risk that lenders often deem as risky. While a beachfront property may be an appealing retirement dream, considerations such as coastal erosion risk need evaluation. Similarly, a property situated by a river or creek may face flooding during periods of high rainfall. These concerns elevate the perceived risk of the property as an investment from the lender’s perspective.\u00a0 Purchasing a house on land with significant geological challenges can diminish the likelihood of a lender approving a loan for the property.<\/li>\n<\/ol>\n

    Understanding the types of properties that lenders refer to as unacceptable properties is crucial in making informed decisions when searching for your dream home or investment property. By evaluating these factors in conjunction with your circumstances and financial goals, you can enhance your likelihood of securing the most favorable financing for your property journey.<\/span>\u00a0<\/span><\/p>\n

    Disclaimer<\/span><\/b>: The information provided in this article is for general information purposes only and should not be construed as financial advice. It is important to seek professional advice from a qualified financial advisor before making any financial decisions.\u202f\u202f<\/span>\u00a0<\/span><\/p>\n

    BPF does not accept any responsibility for any losses or damage incurred because of any reliance on the information provided.\u202f<\/span>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

    When it comes to securing a loan for a property, not all homes are created equal. Lenders have specific criteria for accepting properties as security whether it’s a residential home or an investment property, and certain types might make them hesitate. \u00a0<\/p>\n","protected":false},"author":5,"featured_media":1225,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[14,20,21],"yoast_head":"\nProperty Types You Should Be Wary When Planning To Get A Home Loan - Best Professional Finance<\/title>\n<meta name=\"description\" content=\"When it comes to securing a loan for a property, not all homes are created equal. Lenders have specific criteria for accepting properties as security whether it's a residential home or an investment property, and certain types might make them hesitate. \u00a0As you know lenders in Australia have their own rules for giving out home loans. One big part of these rules is to make sure they are not taking too much risk when they approve a loan. In simpler terms, lenders only want to give loans to people who can pay them back, even if things get tough in the property market. This also means the property itself should be strong and not too risky.\u00a0\u00a0\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/bestprofessionalfinance.com.au\/property-types-you-should-be-wary-when-planning-to-get-a-home-loan\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Property Types You Should Be Wary When Planning To Get A Home Loan - Best Professional Finance\" \/>\n<meta property=\"og:description\" content=\"When it comes to securing a loan for a property, not all homes are created equal. Lenders have specific criteria for accepting properties as security whether it's a residential home or an investment property, and certain types might make them hesitate. \u00a0As you know lenders in Australia have their own rules for giving out home loans. One big part of these rules is to make sure they are not taking too much risk when they approve a loan. In simpler terms, lenders only want to give loans to people who can pay them back, even if things get tough in the property market. 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