I have heard from several sources now, comments about getting finance from several different lenders at the same time to keep borrowing to build your portfolio.
My qu is: how the heck do you borrow more from a 2nd or 3rd bank, if bank no1 already says you’ve borrowed enough?? Am I missing something?[confused2]HappyHomes | HappyHomes
Email MeEach bank has different requirements and different methods of calculating serviceability. So it is possible and sometimes a good move to go to several banks.
If you have everyone with one bank and they say ‘no more’ then you are stuck – especially if cross collateralised. It may be costly and difficult to resolve this.
Terryw
Discover Home Loans
Parramatta
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Another reason for perhaps being able to borrow more from banks 2 and 3 when bank number 1 says your at your limit is competition.
Rival banks will often push their boundaries a little further if you are willing to bring over your existing loans from another bank.
As Terry mentioned though, this can get expensive so do the sums on both and work out which is more beneficial.
Steve.
(YI)“Knowledge is Power”
I would recommend you use a broker because they will be able to advise you on the lender that best fits your needs, they will shop around for you and come back to you with a selection of lenders that will suit your needs. They will also submit the loan to the lender and do all the paperwork required to get the loan approved. This way you dont have to ring around yourself to find another lender from the wide variety we have available.
Some lenders have what they call “maximum exposure” so will have a limit on how much you can borrow so it is important to look at that if you intend having several properties.
Anita Marshall
Advanced Finance Solutions
http://www.advancefinance.com.au
[email protected]The banks are limiting their exposure. If you have borrowed 500k from bank X then they stand to lose 500k if you go under. If you want to borrow another 500k then bank X stands to lose 1million if you go under. So if you go to another bank for the second loan, bank Y , then each bank only faces losing 500k each instead of 1million. That is why another bank may be willing to lend to you when bank X has denied you the second loan. They are simply limiting their exposure to their potential losses.
a lot will depend on your loan to valuation ratio and debt serviceability as well its not just a case of borrow borrow borrow..you have to be able to meet payments (in the eye’s of the banks)and you’d want to ensure that you dont overcommit
Redwing
“Money is a currency, like electricity and it requires momentum to make it Effective”
Online Positive Cashflow and Renovating CalculatorsHi there,
We’re managed to cross-collaterise to the hilt with the one lender. Serviceability not an issue, but want to undo the knot we’ve tied. But only way to borrow from another lender with next property we buy(without swinging loans on current properties across) is to come up with sufficient deposit for a stand-alone loan.
That’s what I find hard to work out. When people are setting up a different loan with a different bank just about every time they buy a new property, they clearly can’t access the equity in their existing properties because it’s tied to that lender. So where are they getting the money to make deposits??
Carlin
Carlin
You can just increase an existing loan, take the extra money and use that as a deposit and borrow the rest from a different bank.
Terryw
Discover Home Loans
Parramatta
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Just send me a blank email, with “subscribe†in subject line.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terry – but how do you approach a bank to ask them to lend you extra money on an existing investment property loan? And do they really not care that you plan to take this money to a different lender as a deposit on a different with them?
I’m just not clear about the stages in all this.
Carlin
You just apply for a loan increase. Tell them it is for further investments. very simple. Some banks may only require a shorter application form to be filled out, depending on the amount. Many banks allow valuations to be done every 3 months.
ANZ is a good bank for increases, under $100,000 it is only a 2 page app form, and they allow a valuation for free 3 times per year if you are on the breakfree package.
Terryw
Discover Home Loans
Parramatta
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Sign up to my mailing list.
Just send me a blank email, with “subscribe†in subject line.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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