23 May 2016

The Lending Process

Here is a flow chart to demonstrate the process that the bank goes through to determine whether your loan application will be approved or not:

Investment-Finance-word-doc-Blogs-160124-r1-2

There’s a lot more to finance than the way you structure your finance, which is important. When you start to really put it together and you start to get a number of different properties, it becomes quite complex as to how things can be financed.

Whilst a lot of brokers in the industry will be out there and will say sure, I can do that, but the way they do it means that you’re totally stuffed when it comes to moving forward and getting the next deal done. A lot of times things are grouped together and your house, particularly your home, is thrown into the mix and is put at risk for maybe $2, $3, $4 million dollars’ worth of real estate in the rest of your portfolio.

So the way you structure your finance is very important. Whether you go full doc or low doc loans, whether you have full income requirements or whether you don’t, and the difference in the levels and the difference in what amount of information that has to be provided to get that kind of deal through all come into question.

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