Bank and strategy change?

Question from Kapil updated on 9th November 2012:

I own three properties - two investment and one I live in. I have all three mortgages with BANK A. With the new valuation the current LVR is 79.4%. I would like to purchase another rental property and have tried with BANK A twice for a 82% lending but they keep declining even through I have a positive banking history. I have been servicing all the loans for three years. I am a sales executive and my income is based on 60/40 split. According to bank, I heavily rely on commission but I have been consistently earning over $100,000 for past four to five months. I have been working with my current employer for 10 months and was three years with my previous employer. I have saved 10% for a small rental property. Do I change banks? How do I get my bank to approve me a loan for the third property. Also, do I invest in a rental property or a small business instead?

Our expert Kris Pedersen responded:

You are likely to be best to try another lender. In your situation you are likely to be not getting approved because you have only been commissioned based with this employer for the last 10 months. If your occupation is the same as what you were doing with your previous employer it may be possible to put together a story showing your history in the occupation and your consistent earnings over the three years 10 months.
In regards to what is best to invest in out of a business or an investment property this all comes down to what you are wanting to achieve and also where your skill set is best suited.

Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.propertyfs.co.nz

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