Hello Everyone, first time on the forum.
I am looking for advice and information. I am not new to investing in property and have several properties with approximately a million dollars in loan. My current LVR is 80% with a rental income of approx. $65,000. I have had all my loans with one instituition. What I have now experienced is, if you have all your eggs in one basket, that instituition knows too much and wants to control what you can and cannot do.
I have hit a roadblock, which is as they put it “They are concerned that I am too rent reliant”. What a joke. It is far better in wealth creation to have a tenant and a property owner pay for the loans along with the help of the taxman.
Has anyone had similar problems? And if so, how were you able to get around this? And which lending institutions have been able to help you?
All my loans are interest only at 5.97% with a line of credit. I am now trying to leap frog for more investment opportunities in property.
Thanks to anyone who responds for your time and input!
Welcome [
]Definitely a few strategies to consider, depending on what you are willing to do to free up investing options, ie:
1. refinance everything with a few different lenders (incurring break costs) to minimise impact on serviceability (within one lender they apply a safety factor to interest rate of about 20%, between lenders they’ll normally take the face value of the monthly commitments) AND maximise flexibility, ie to cash in on equity gains via inc. amounts etc.
2. venture into lo doc territory where income is self-stated, source not as important – some banks like Macquarie have great reducing rate loans that are in line with basic variable loans after three years
3. go back to your bank and speak to different branch managers – not all apply their own banks policies equally.
Hope that’s a start? Step 1 I always think is to see a broker!! There are quite a few brokers on the site, including me, and they all seem pretty genuine so give them a call.
This is a common problem after you get a few properties. CBA is like this.
I would suggest trying a different lender, maybe using a low doc. But if you are 80% LVR, things are pretty tight. You will geernally need 20% deposits with low docs. Do you have other funds available?
Another suggestion is to write to you bank and ask for a payout figure for all of your loans. They may then give you what you want!
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
The problem you are facing is noted with a few lenders. Anz and Westpac are also noted for this comment.
Lo Doc’s is a good way to overcome this hurdle.But the problem you are facing is not the only problem you COULD be facing. This is also highly important for new investors.
In regards to what Melanie suggested;
Spread your loans around!This is why.
If someone gets a LOC on their PPOR for their deposit on an IP and go with the same lender for the mortgage on the IP, they run a risk. If someone gets a LOC on their PPOR for deposit on a IP and goes with another lender for their IP, they run very little risk. WHY?
Well if something happens, (repossesion) the bank can take both properties or your PPOR. For Example; If PPOR is valued at $400000 and has a mortgage for $200000 and the IP is valued at $100000 with $80000 owing, which one do you think the repo guys are going to take?
So to protect your properties (especially your PPOR) spread your loans around. Depending on how many you have, a good average is 2 or 3 properties with one lender. But your PPOR should always be by itself.
There are other technics also. Which my clients have embraced.
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