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Within this section we touch on some of the most common product profiles and parameters of asset lending home loans. This will provide you with a brief insight into how an asset lending home loan works.
Let's take a look at some of the product parameters which generally apply to asset lending home loans.
Minimum and Maximum Loan Amounts
Generally speaking an asset lending home loan can extend up to 750 thousand dollars with expections going to 1 million; this applies if you require 70% of the equity available in your property. The maximum home loan amount can vary and this depends on the LVR you require and the location of security on offer. Minimum home loan amount can be as little as 50 thousand and many asset lending home loans are around this figure as clients seek to invest in shares.
Location Guide
The location of the security on offer plays a major role in how much the asset lending home loan provider is able to offer as a total loan amount. These home loan providers are driven by postcodes and they have a postcode listing broken up into categories, these categories determine the maximum LVR and hence loan amount able to be offered.
For example, the categories generally range from 1 through to 6 with being the preferred postcode location. If you were to apply for a 75% asset lending home loan and your property was in a category 4 location then the LVR may be limited to 60% with the result being a lower total home loan amount.
Investment Guide
Asset lending home loans are specifically to be used for investment purposes only; this is due to the fact that these types of home loans are not governed by the UCCC. As these home loans are for investment only the interest component may be able to be claimed as a tax deduction although we suggest you seek a tax professional's advice.
As mentioned previously you are able to invest in things other than property such as shares, managed funds or investing in a business. The suitability of the type of investment is up to the asset lending home loan provider to determine and they may require further information about the type of investment you wish to make based on the risk factor
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