Hi there good people.
Just trying to find out what the procedure is for getting a line of credit secured against a property which is owned outright (not ppor). I’m trying to get equity through lines of credit against my I/P’s to use for deposits as well as service the loans into the future. Obviously full doc loans can only be taken so far before serviceability (in the banks eyes) become a problem but is it possible to get a lo doc loan (L.O.C) if I was to use one of the unencumbered I/P’S as security.
Thanx in advance
Hi Maximus,
Many lenders offer low doc LOC products, The lending institutions will assess your ability to service/qualify for the loan based on the income that you state in the self-certified application.
Lending institutions will provide up to 80% LVR of the value of the unencumbered IP, Cheers.Regards
Steven
Mortgage BrokerMobile Mortgage Market
Ph: 0402 483 216
[email protected]
http://www.mobilemortgagemarket.com.auPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
Or alternatively if you do not want to declare an income you could try a NO doc option up to 65% lvr. You just need to have an ABN for at least a day…
Liz
Mortgage Lender
1300 780 826Thanx for that guys
Originally posted by maximus:I’m trying to get equity through lines of credit against my I/P’s to use for deposits as well as service the loans into the future.
I don’t know why you are looking for a LOC but what concerns me more is your comment above. If you need a loan so you can service other loans, I would be advising you not to borrow any more money. You will be destined for disaster especially if tenants move out which is very common in the current property market in many parts of Australia.
Robert Bou-Hamdan
Mortgage AdviserOriginally posted by The Mortgage Adviser:Originally posted by maximus:I’m trying to get equity through lines of credit against my I/P’s to use for deposits as well as service the loans into the future.
I don’t know why you are looking for a LOC but what concerns me more is your comment above. If you need a loan so you can service other loans, I would be advising you not to borrow any more money. You will be destined for disaster especially if tenants move out which is very common in the current property market in many parts of Australia.
Robert Bou-Hamdan
Mortgage AdviserHi Rob
Thanx for your input.
My situation is as follows; have numerous I/P’s which are virtually neutrally geared, own my ppor. Intend on getting access to equity (through L’s.O.C) to use for a deposit on another I/P as well as servicing the shortfall on just that I/P loan for a period of approx 10 years. It’s similar to using a cashbond for the same purpose.
The difference with the new I/P is that I intend on moving into it in X amount of years.
So with current loans taking care of themselves (not to mention increasing rents over the years to throw into new loan if need be), you could say that it is akin to living off equity except that instead of buying toys I am buying something (new I/P) that will increase in value.
Don’t forget that when the timing is right and I decide to move into new I/P that I can sell my current ppor and use the funds from the sale to pay down loan.
Thanx again
I guess you know that you will be paying interest on interest doing what you plan so your costs will be more than they could otherwise be.
If you have not done so already…
Have you looked at restructuring your finances to take advantage of potentially cheaper loans or interest only options which may improve your net position?
Have you considered restructuring your repayments to reduce your ongoing interest expense and further improving your net position?
How about using an offset account against one of your IPs which may improve your cashflow and deposit requirements?
Good luck with it all.
Robert Bou-Hamdan
Mortgage AdviserThanx again Rob.
Yep, will be refinancing a couple of loans and will be using offset and L.O.C combinations. Have done calculations with my accountant and will review situation on a regular basis.
Any excess funds will go on the loan for the new purchase as this I/P will eventually become PPOR.
I still don’t know the point of the LOC other than to be stylish but you seem sold on the idea. Good luck with it all.
By the way, I think your accountant is wrong telling you to put money into an IP when you will have debts against your PPOR. But hey, what do I know??? I am a lowly mortgage adviser!
Robert Bou-Hamdan
Mortgage Adviser
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