80% LVR calls by the bank?

Viewing 7 posts - 1 through 7 (of 7 total)

nathan210
Participant
@nathan210
Join Date: 2003
Post Count: 81
June 28, 2004 - 5:57 am
guys/girls
has anyone ever heard of a bank or financial institution asking a client to pay money to bring the LVR back up to 80% or ask them to obtain LMI after they have established a loan?
for example, if i purchased a house for $200K on 20% deposit, i.e. $160K loan, and the property value drops to say $180K, causing the LVR dropping to 89-90%, has anyone experienced the bank asking for more cash or LMI?
thanks for your thoughts [blink]
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
June 28, 2004 - 6:07 am
Like a margin call.
I have heard it happening to rural property loans, but never seen or heard of it happen to residential. I don’t know if it would actually be possible for the bank to do this or not.
Terryw
Discover Home Loans
North Sydney
[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
Mortgage Hunter
Participant
@mortgage-hunter
Join Date: 2003
Post Count: 3,781
June 28, 2004 - 6:10 am
Never heard of it.
Margin calls could fuel a huge dip in the market as it did with the stockmarket some years ago.
I couldn’t see it becoming a widespread practise amongt residential consumers.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
woodsman
Member
@woodsman
Join Date: 2004
Post Count: 714
June 28, 2004 - 6:24 am
I know of a few examples in the early 90’s on commercial properties. Haven’t heard that on residential.
James
westan
Member
@westan
Join Date: 2002
Post Count: 1,950
June 28, 2004 - 6:43 am
Good question nathan and thanks for the comments guys
i remember i used to have this discussion with a friend and he used to warn me that the banks would do this to me if my properties dropped in value, i said i’d never heard of them doing it, and didn’t think it would ever happen.
Nice to hear your experience and thoughts
regards westan
thecrest
Participant
@thecrest
Join Date: 2004
Post Count: 992
June 28, 2004 - 7:26 am
Just settled on a commercial property financed by St George. They have the option to call on more cash from me if the LVR exceeds 60%.
cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Me
selling motels in NSW
nathan210
Participant
@nathan210
Join Date: 2003
Post Count: 81
June 29, 2004 - 4:30 am
thanks for your thoughts guys/girls, very interesting!
[party]