All Topics / The Treasure Chest / What the Bank said

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  • Profile photo of HameHame
    Member
    @hame
    Join Date: 2003
    Post Count: 16
    August 12, 2003 - 12:50 am

    Hi all,
    I have been reading and learning an amazing amount in the last year and are going to be free of the daily grind within 5 years.I have 2 IP one +ve and one -ve, I am ready to increase my holding.
    I have equity of around $180k.
    I went to my bank manager and asked how much i could borrowon our income of $95K,he said $160K .
    I was suprised that the level was so low and his reply was that it was all about servicing the loan. Someone then told me i could use that $160k as deposits on property. I am confused, i don’t like being in that mindset as it can be extremely destructive.
    I know i am showing my ignorance and plan to meet with my accountant shortly to budget out our goals.
    I just hoped that if someone can shed some light on this basic first hurdle for me i can move now as i have located a property that fits the models and don’t want to use all of my equity on this deal.
    Thanks Heaps
    Hamish

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    August 12, 2003 - 12:57 am

    Did the bank manager include the potenital rent from the property you will be purchasing? From what I have seen of bank managers, probably not.

    You could get a LOC setup to access some of that equity. You could then take the deposit for your new property from this LOC and go to a different lender for the main low. Some people use low doc loans when they can’t service anymore, they go to a different lender and jsut declare their income. No confirmationis done by the low doc lender.

    Terryw
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of picja1picja1
    Member
    @picja1
    Join Date: 2003
    Post Count: 144
    August 12, 2003 - 1:11 am

    Also, different banks have different servicability. Another words, one bank might lend 160k and another might lend 200k. Generally, ANZ and Westpac lend the most, however, there are lot’s of non- banks that can do better, also.

    Profile photo of HameHame
    Member
    @hame
    Join Date: 2003
    Post Count: 16
    August 12, 2003 - 2:06 am

    Thanks for the response and sorry to be so vague.
    just some answers to your questions.

    To Micheal & Kaye:
    $95K does not include rents from properties, that is our salary only.
    $180K equity is only on our PPOR.
    I did tell the bank that i was borrowing on an IP,although at the time it was a -ve proposal.
    The bank did not even ask about rental income, I asked for my maximum borrowing capacity.

    To TerryW:
    You,re right on the rental income.
    We established a LOC on our PPOR loan for $60K, we have paid all bar $10K back on that, and immediate access to the balance.

    Thanks again for all your advice it is extremely valuable, If your in WA let me know and i’ll shout you a night out.

    Cheers
    Hamish[;)]

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