Hi Yule7575,

Yes that’s right. If you know what you want or don’t want it should be fairly easy to choose by having a bit of a chat. The first question I would ask is do they deal with investor a lot (they will all say yes I suppose) but then drill down and ask about whether they recommend putting all business with the same lender and cross collateralising or if they prefer to use stand alone structures. If they don’t understand that then alarm bells should ring. Also if they jump straight into talking about % rate that would be another alarm bell. They should be asking lots of questions as to you current and future plans, what LVR you would want to start at and why etc.

Hi Dave,

The problem you have is if you want to use company profit then you would need the other shareholder director to guarantee you. Stupid I know but the logic is the bank doesn’t want to rely on income that your business partner could withhold.

Your only shot is to supply interim financials prepared by an accountant for this year supported by BAS statements to confirm turnover and the last say 4 years ITR’s to show last year was an anomaly. Also you would need a good explanation as to the decrease in income last year preferably supported by n accountants letter. If you could provide all that I think you would be able to get an exception made. Either that or look at a low doc type option.

Thx, Marty

I had Nab on a commercial deal want to trust to be a guarantor for this very reason. I think its not required in practicaity ie if the beneficiaries are giving personal guarantees why should the bank care about the trust not distributing the income. At the end of the day they are lending the person the money really not the trust otherwise why would they allow a 2 days old trust to borrow money.

Not fair at all….With a number of recent enquiries on a credit file negatively affecting the chances of approval (especially on a 90% + deal) I and I am sure many other brokers are loathe to check a clients file before submission in case our enquiry trips the deal over and causes an auto decline. IT DOES HAPPEN. So the best way is for a client to check themselves which doesn't count as an enquiry. The other alternative is asking the client upfront if they have had any defaults but of course this wouldn't have helped in this case.

If you are talking from your own personal experience with each lender I dont think that really qualifies you to comment on banks credit policies in general.

CBA conservative? I think most brokers would disagree with you there. They do all sorts of lending that others wouldn’t. Perhaps not great with serviceability so that is perhaps where you are coming from? but by far the most lenient in many other areas.

Your problem I think is that someone at the bank told you a furphy ie thet they can use the valuation over purchase price to give you instant equity….that is clearly not policy. It has always been policy to take the lower of the two when calcultiing the LVR.

Therfore you are going to have to pay lemders mortgage insurance (LMI) or have 20% deposit or have a guarantor supply additional security.

Here is an idea….

If you have a relative that has equity in a property and is willing to be a guarantor for you short term you could use thier property as additional security to settle the purchase without paying LMI, then a month after settlement you apply to have the guarantor removed and the bank will be obligded to to go off the valuation they have on file. Then you have the equity!

One big problem though is if they order another valuation at that point which could be the tricky part as if the sale goes through at the lower amount this may negaitively affect the subsequent valuation amount. However CBA normal policy is they WONT order a new valuation if the last one is less than 3 months old.

Some bad advice in amongst some good..for mine.

Borrowing via a p/l is very rarely a good idea. Crossing to boot. AVOID.

Hi Tiggie,

Firstly sorry for your break up.

My advice is your situation is not sustainable long term, therefore you are going to need to acquire an ongoing income even if it is part time or casual work to strat with.  It may also be an opportunity to get out of the house and meet some new people. I would leave everything as is for the moment and take some time out to reflect on what you want to do work wise and lfe wise. Then jump in.

The professional renovation idea maybe it but start this off slowly with another regular income job as many try and fail doing this.

The OP would not be complaining if rates had moved in his favour.

I would say if you are happy to sell if the price is right i would get in touch with your neighbour and strike an agreement with them first before you do anything legal wise with the developer ie you agree with the neighbour on X amount each and then sell as a job lot for a premium to current market value.

As big money is involved do not trust anyone at face value and get a good lawyer to protect your interest.