Forum Replies Created
Hi Heather,
I think you're referring to a 'fixed and floating charge'.
Examples of fixed assets are; real estate, cars, equipment, machinery etc
Examples of floating assets are; cash at hand, stock, trade debtors etc (move up and down)
A fixed and floating charge (also known as a mortgage debenture) can be registered against a company. It means all of that company’s assets (fixed or floating) form part of the banks security. A fixed charge on a specific asset has priority over a fixed and floating charge registered against the company.
When a company goes in to liquidation; anyone with a FFC will have priority over all unsecured creditors. This is why when big companies go broke their banks get paid before small suppliers.
Some banks register a FFC when they lend to a private company buying real estate. It means the security is the property plus any rent, cash or assets in the company accounts.
Contentious Banker
I’m pretty sure RAMs will need the mortgage insurer to sign off in the deal:- therefore it’s not going to be their call. You need them to check the post code lists the insurers have to see if they can do 95% in Mt Isa.
Shame your with Westpac:- they’re very tight however do have room in their policy to lend 95% to existing clients. If they approve any 95%ers is a different story.
If you are buying at 300k with 5% deposit, do you have a family member that could provide a limited guarantee to keep the LVR down?
If you search his ABN on the net he is a sole trader set up for approx 3 months. I think the concepts good but he needs to keep an eye on the markets he's promoting his work in. No point in offering something that can get your clients in trouble… give the guy a bit of time and he might work it out.
Agree with gurjjeet; removing powerlines etc just makes the guy look dodgy / promoting deception. If he focuses on the other pics e.g. removing towels and clothes from the bathroom floor, uncluttering the tables and general tidy up it could be a good service.
One would think if you get a good photographer you could stage good photos anyway. You’re always better off with a good photo to start with…
Richards got a point re the personal debts however be careful. If you have a CBA debt and repay it; you are back to 90% as you no longer have an existing debt facility. Each bank defines an existing customer slightly differently.
Who are your existing debts with?
What savings do you have?
Is the savings genuine savings?Re. credit score. One of the worst things for a credit score is a purpose being ’refinance' or 'cash-out'. If yours is a 'purchase' and the existing debts are outweighed by assets you might not come up too bad.
I don’t know about the Mt Isa issue (at least there is no risk of tsunami…).
Do you have a CBA credit card, car loan or debt facility?
If you have an existing debt with CBA (or unused credit card) and have held it for more than 6 months; you can get 95% plus Mortgage Insurance (up to max 97%)
CBA approval includes automatic Mortgage Insurance approval for loans under 1M.
Based on the rates I’m guessing your with CBA and looking at NAB.
If it’s NAB I don’t think they will be cheaper than the other banks for long. Within 12 months the margin will narrow. Nab have higher cost of funds than ANZ and CBA. They are just buying market share as their loan book is less than half the size of CBA or Westpac ( albeit they much bigger in business banking).
As funding pressures ease the banks standard variable rates will line up again.
If you read the fin review or look at the APRA web site with bank stats etc; you will see that CBA and Westpac are still growing their loan books much faster than nab; dollar or pecentage terms.
Funny that even with the lowest pricing NAB still can’t keep up; the reality is that they still learning how to be good at the residential market; pricing is not everything.
I’m confident to say the rate benefit is short term.
A couple of things to consider.
Firstly; although almost every broker will tell you they have access to commercial finance – most have no idea how to present a deal.
When it comes to the major banks; dealing with brokers is very different to home lending. Firstly they work on revenue models; The all up rate (usually a base plus a margin) can change from client to client depending on risk, security, size of the deal and overall revenue the bank gets from the client. If your base rate is 3.5, margin 4; all up rate is 7.5. Pay a broker 0.25% trail and the rate goes to 7.75% or the banker takes a hit on his revenue.
Broker commission is factored into the pricing model with all majors e.g. They have more room to move on price when you deal direct.
2ndly; most good commercial bankers don’t want broker deals. This is partly due to the reduced revenue impacting on their bonuses and the general quality of broker submissions (commercial deals).
When I was at NAB we had to let deals go to competitors but we knew without the broker involved we could have matched the pricing.
3rdly. Banks have moved away from dry lending e.g. They want the additonal facilities e.g. Bank accounts, depoist insurances etc. Dry lends have less chance of being approved.
It is commonly known NAB are the leaders in this field. They are the only ones that let the bankers approved their own deals; e.g. If you get a banker out to see you; they should be the one making the final decision on the deal…
The feeback I’ve had is similar. They did not say to receive it in writing however the main point was not to receive any information apart from a name and ph number. E.g. If they start advising you what the client is doing apologise and tell them you have to get that information from the customer.
I don’t work for CBA however give them 5-10 deals p/m. In andrews first post he says he has a great relationship with his bank, good pricing And expects to use them for other purchases however can’t get an offset. Although the product is slightly inferrior If you adapt your day to day banking the differences become irrelivant.
There is no significant financial benefit for Andrew to change apart from the commission or bonus for the banker / broker that moves him.
Keep in mind most brokers on this site support not paying down debt, rather putting funds in offset. Question is if you have a large sum of funds in offset do you really want that in your day to day bank account?
CBA are by far the most aggressive retail lender and have the most flexable credit assessors out of the major banks.
Why give up a great relationship just to have no min withdraw from your offset?Hi Richard,
ASIC are still reviewing the referrer part but I actually support it…
ASIC are not interested in the agent / accountant who tell the client to see one of the bankers / brokers up the road. They are targeting the real estate agent / accountant that forms a strategic referral relationship with a financier or broker and refers regular business.
The problem is when the relationship between the referrer and the banker / broker becomes established, it becomes stronger than the relationship between the banker / broker and their client.
For example; is a finance broker in a real estate office Or referred by the real estate agent working to get their client the best deal, or are they trying to help the real estate agent close his / her sale?
You then have the situation where the accountant / agent get an undisclosed kickback from the broker.
Another issue is privacy laws when the broker / financier provides feedback to the referrer re the status of an application, how much they can afford to spend and so on (limits the customers negotiation ability).
I’m happy to support regulating referrals, the way they get referred, remuneration and most of all – limiting the feedback given to the referrer… A ban on commissions to accountants and agents even better…
The overall concept needs some adjustment (ASIC are looking at that now). All up it’s a step in the right direction.
Banker
Min depoist $500. Min withdraw $500. You can have your salary / rent direct credited to it and just transfer say $500 out each month for cash.
Due to the min withdraw you cant use it for all you day to day bills however if you use a credit card for these you just need one withdrawl p/m to pay your bill. You can also have ATM access however once again limited to $500
Keep in mind the idea is to use it to store your savings; as an alternitive to putting it in your loan/redraw. Most people don’t want $20,000-$50,000 sitting in their day to day account anyway so it helps to have a day to day account in addition to an offset account.
If you hold an average of $500 in your day to day account, you are only missing out on $35 p/a by not having it offset ($500 x 7.0% p/a).
Westpacs annual fee is 395 versus Cba 350 so you’ve got your $35 back even if rates were the same.
Banker
Hi Dan,
You shouldn’t have any major problems as long as you have a good banker. I’ve financed plenty of accounting firms in VIC; sometimes without real estate. I’ve never not been able to provide finance to partners after they buy in to a firm.
Stay with a major and avoid mortgage insurance if possible.
Banker
Sorry GOM but it is all a load of bollocks.
CBA was bank of the year. ANZ Home Lender of the year. Someone else took personal lender of the year.
NAB Socially Responsible Bank of the year. Westpac Climate Leader of the year. CBA and ANZ have put their awards on their home pages – the other banks will follow (happens every year).All up there are over 40 awards. They also have product based awards e.g. home loan of the year, investment loan of the year, fixed rate of the year etc.
It's one of those competitions where everyone is a winner. Bit like kindergarten graduation for the bankers.If they are a director of the company it will come up on the credit check.
Is it approved? Tell them bankers says it should take less than 24 hours…
The offset with Cba is not too bad but min withdraw 500. If you use a credit card for your day to day spending and just withdraw once per month from the MISA you have no issues. You also néed a day to day bank account however if you are using the credit card as outlined above you only need to hold a float of a couple of hundred cash; if this 200 is not offset it won’t make much impact.
Just set up a direct debit to your MISA on the same day you get paid.
The benefit is that as you save money in your MISA it’s easier to determine what savings are long term offset versus what is day to day spending.
Using a Westpac rocket or similar causes problems where you have your redraw sitting in you day to day account. If you choose to seperate them and open a 2nd bank account then one does not offset; same as CBA.
In my experience people that offset in their day to day bank account tend to over spend; two seperate accounts is easier to monitor and budget.
Westpac are tight on these. If your financials and combo reports stack up you won’t always need a Val : – won’t cost too much to move.
You would be borrowing with a max term in line with balance of the lease agreement.Servicing is often an issue if the lease is under 10 years. If your balance sheet has a directors loan owing too you change the purpose of your application to refinance of Westpac and the other balance sheet debt. You then replace the debt to you on the balance sheet to bank debt and take your initial cash back out of the business.
Banker
I’m trying to work out from the original post if there is enough equity in the existing ppr and the land to do it without worrying about a build contract. It does say the land is owned outright and there is equity in the other house.
If you took a line or credit to 80% of the existing house and 80% of the land would you have enough money?
You only need to worry about the construction component if you are reliant on the end value for security…
Hi Scab. Ask the banker to check the wealth package fee. If your partner pays the annaul fee that will cover your personal accounts: not an application in the trust. The trust will have its own package fee..
The trustee can always buy a property or take out a loan in their own capacity however the loan contract will reflect that. The money will be lent to the company and not the trust. It would be an accounting issue re if the loan reflects in the balance sheet of the trust or the balance sheet of the trustee.
You might trip up with the contract of sale; if the property is purchased in the trust it will show there..
Often bank docs such as fixed and floating charges are registerred in the name of the trustee is their own capacity and in their capacity as trustee.
Not sure if that answers you question…
