Hi,
I currently have several loans all with the one lender and this is for finance over several properties. The pain I see is some are cross collateralised, others not. They all have different start and end dates and different IR. None of this matters as I measure property performance based on property return and market value of asset. My loans only feed into my cashflow performance and borrowing capability.I want to simplify this. Is there a product where you have your securities held over here on the left and then you have a pool of finance over here on the right? I can then add or remove assets so long as my LVR is at x%? I think its kind of a wholesale finance model. But I would still want a competitive IR.
Any ideas would be great!
Thanks in Advance,
MatMathew
http://www.arrttt.com
Custom Oil PortraitsHi Mat
Maybe you are thinking of a big LOC type loan. But this is probably not the best way to go. It can get messy, like you are experiencing now.
I think it is far better to keep each loan/property separate as it is easier to
– increase the loan (only need to value one security)
– leave the bank (no need to apply to uncross the loans)
– know exactly what the values are (it may be just one big pool otherwise)
etcTerryw
Discover Home Loans
Parramatta
[email protected]
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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
I am with Terry not a great lover of 1 big LOC covering all of your properties.
By all mean utilise a LOC for accessing equity but structure it so that you have secured by 1 property.Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
Hi Matt,
I have the LOC that Terryw is talking about. I’ve had it for a number of years and I have found adding and subtracting properties no problem (I’ve only sold one).
I used to have separate loans for each property so the bank fees were high, plus more statements and different rates.
I keep separate finacial statements for each property on my computer (always have) but I also have software that can designate interest % split to each one, so it’s easy for the accountant at end of year.
The other benefit is the bank fees are less, and because the loan is a decent size now, I have been able to negotiate a nice interest rate – 1/2% under standard variable for the life of the loan.
It has 2 sub-accounts (like an offest account) – one for personal stuff and the other for the I.P’s, with separate statements for each account.
When I add another property there are no extra loan application fees; only mortgage stamp duty adjustments for the new loan limit, and a property valuation fee. It is cheaper than applying for new loans each time.
Cross-collateralisation is no concern as I maintain a low LVR and have no worries that the properties will ever need to be sold unless I want.
I can change the credit limits between sub-accounts as I wish. I find this product lovely to work with.Cheers,
Marc.
[email protected]If you are going to use a LOC, St G have one of the best products – called the Portfolio. It can have many sub accounts (maybe one for each property), and these can even be in different names.
Terryw
Discover Home Loans
Parramatta
[email protected]
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
Hi everyone,
Thankyou for your posts. I dont mind having lots of loans, but the concept of net loan to net asset value ratio rather than on each loan is what I was after. That way I can change loans, change assets, etc and not have to worry about cross collatoralisation.It sounds like since I last looked a new product has come to market about portfolio management so Im going to start investigating it. Ill let you know how it works out incase it is of benefit to others.
Thanks
MatMathew
http://www.arrttt.com
Custom Oil PortraitsOriginally posted by Terryw:If you are going to use a LOC, St G have one of the best products – called the Portfolio. It can have many sub accounts (maybe one for each property), and these can even be in different names.
Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe†in subject line.That is the one I use Terry. I have chosen not to have a sub-account for each property, but that’s just me.
Cheers,
Marc.
[email protected]
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