Hi Guys
I am in a pickle with structuring my loans as ANZ has Xcoll 6 IP against my own home, which I own. On brokers advice I am in the process of getting titles back on my own propery as there is enough LVR to leave the rest with the bank. My aim is to move on and be able to borrow more money to buy more property.
Went to Wizard Home Loans as I am in the process of buying another property and they have approved the finance for this 100% plus costs (at 6.63% int rate), but want to take this new property plus my own home as security and they have offered me up to the value of the equity in my home to access when I want to as well.
Now I am wondering if this is the right thing to do – borrowing against my own home as I know ultimately it is best to keep your own assets free. But I don’t know how else to progress as the ANZ were very unhelpful.
I am planning to use the equity draw-downs to fund deposits for other properties with other lenders. Is this allowed? I am afraid to ask this question to Wizard in case they frown on it but they did say I could use the draw downs for anything – world trips etc.
Anyone had any experiences or legal knowledge with Wizard or these types of loans as I am getting cold feet now and wondering if I am putting my own property at risk?
Looking forward to some encouraging replies.
AnitaAnita,
Did your Broker recommend Wizard? Wizard are a securitised lender so even if you are not paying LMI – you have increased your exposure to them. I doubt I would have chosen them for you but then I don’t know your situation at all.
If you don’t wish to offer up your PPOR to them (and they will take everything they can get from you) just topup the PPOR loan by enough to find a 20% deposit plus costs from it. If it has no loan against it then open an LOC.
If avoiding xcoll is very important to you I suggest you take your PPOR to a third lender so this cannot happen under any circumstance.
All the best,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi Anita
Any lender that ask you for the IP as security as well as your own PPOR has obviously no idea about to structure a loan correctly for you.
Certainly make sure that you un Xcoll the loans with ANZ Bank but dont fall straight into the same trap with someone else.
I would have them all sitting as stand alone deals and if necessary use the equity in your own home to draw down 20% deposit . Approach a new lender for a totally separate loan of 80%. Dependant on how you want to proceed you could have a separate lender for your own PPOR than the IP’s.
Structure it so that all incomes, salaries rents or similar are being directed into a 100% offset account and have this offset account linked to your PPOR. Have the IP repayments feeding off the Offset A/c.
The Wizard rate is about right although certainly as a securitised lender the features and overall package lacks a lot. Suggest you correspond with a mortgage broker who can give you a overview.
Richard Taylor
Residential & Commercial Finance Broker
**Lodoc Commercial loans from 7.39%**
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Hi Anita,
The grass is always greener on the other side !! until you get there.
You may be unhappy with ANZ, but I can guarantee that you will be just as unhappy with Wizard.In a post recently I described my structure, and said that I was planning on leaving my lender where I have set up what you are proposing, (except that I only have a lend of 80% against my PPOR). I have a seperate investment account as part of my PPOR mortgage that I use for IP deposits and expenses. That lender is Wizard.
I didn’t know the best structure for me at the time and I can assure you they were not able to suggest anything different than what I asked for. I now know the structure was all wrong.
You are quite obviously at a point where structure is pretty important, so I’d suggest 1) speaking to a broker, 2) not using Wizard, (at least until you know what your best structure is, and are able to implement it without there help, because you won’t get help from them that is benificial to you).I am not unhappy with there facilities, their online stuff suits me fine. I just know that they can’t help me move forward.
Mal
Getting out of your comfort zone, can help you become comfortable
Anita here!
Thank you so much for your informative replies. I get the impression that whichever broker you get information from seems to want their piece of the pie. I have had advice to pull loans away from ANZ (at a cost). I am not entirely unhappy with ANZ it’s just that they kept so much collateral from me and didn’t give me advice on how I could constructively use it. They could have offered me an equity loan or line of credit as they knew I was looking at investing further.
Anyhow, it’s their loss for not offering me customer service. Still waiting for my title back on PPOR after 6 weeks.
Unfortunately, as an offer has been accepted on another IP and only had 3 weeks to get finance – I am left with no more time to change from what Wizard have offered me. So, yes I feel that I have just created the same situation as I had with ANZ EXCEPT that I HAVE purchased another property and I DO have the funds ready to purchase more when the occasion arises plus I have access to money to do improvements too. I never had this facility with ANZ.
Oh well, no situation is 100% locked in, I may not have structured things quite how I would like but at least I am able to progress abit further with my purchases. I have to bear in mind that I am NOT a high income earner so sooner or later I will get stuck again because of serviceability.
Next time I will seek advice from this forum earlier as there seems to be a wealth of experience and advice to gain from it.
Thank you once again.
AnitaHi Anita
Without going to all of the expense of refinancing every loan why not just ask Anz what it would take to have each loan on a standalone basis and then if necessary consider refinancing the PPOR and structuring that correctly to enable you to push forward with new purchases.
It wouldnt be that difficult for the Bank to give you the information and any broker can then steer you accordingly.
Richard Taylor
Residential & Commercial Finance Broker
**Lodoc Commercial loans from 7.39%**
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Anita,
If you feel you don’t have time to go elsewhere then I would suggest you inform Wizard to set this up as 2 separate loans.
E.g.
Loan 1 secured against the IP at 80% LVR
Loan 2 secured against PPR for the remaining 20% plus purchase costs. CheersRegards
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.
Anita,
Looks like you have a couple of brokers not after a piece of anything right here.
ANZ have good products. I just find there service at application frustrating. I suggest you stick with them if you can.
Try a major lender rather than Wizard is my advice – but I don’t really know your situation enough for anything meaningfull.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Anita back again
Thank you for all you advice. I don’t owe anything on my own home but have now released the title to Wizard so they have arranged to lend me $180,000 on an IP now near settlement , plus $341,000 to use whenever.With Low and no doc loans willing to lend 80% then am I able to draw down 20% deposits from the Wizard loan without questions asked, and get 80% loans from other institutions? Can you see any drawback to this? Is this how you would do it to progress into buying more property? I know the danger is in servicing the loans but I only buy properties where the rent almost covers the loan payments or at least $25-50pw shortfall.
Still confused![blink]
AnitaAnita,
That sounds like a plan to me.
I would warn you against using lenders like Wizard too often. Because they are securitised lenders they mortgage insure everything – even tho you only pay LMI over 80%.
This means you are raising your exposure to the LMI companies.
Eventually they will start to say no – and LMI, when you really really need it, can be a vital tool.
So when you choose the new lenders for the 80% lends try and pick the major banks.
Does this make sense?
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Yes, Simon, thanks.
I have just got the OK from National for an 80% loan at 5.95% fixed for 1 yr so I hope this plan will work and I don’t overcommit my borrowings with Wizard. Plus all loans stand on their own!
Hope I am doing the right thing.
Anita
Anita,
What does this rate revert to after the first year?
I suspect it is 7.32% and you will be locked in for several years.
Do your sums and determine whether a basic variable on 0.5% less is a better deal over your timeframe without the honeymoon rate for year one.
A Choice Package may do even better.
If your broker has good contacts in the NAB he should be able to get a little bit more shaved off the rate.
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
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