Line of Credit or Xcollateralise?

I am with Terry keeping them separate is the way to go for both cost as well as accounting at the end of the year.

I dont believe that Wizard offer a Nodoc loan but if you have the 20%+ deposit you should be able to source funding on the security property iteself at an attractive rate of interest.

Although in saying that I am not a great fan of Wizard or should I should say GE and feel clients can do better if they shop around.

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.

Hi. As most here say, and I do too, it makes sense on all counts to keep each loan seperate, and not ‘crossed’. However, if it comes down to being able to secure a loan, as opposed to not being able to, sometimes cross colatorising a loan/propertys as security is the only way to achieve what is needed to be done. In all fairness, if you do not plan on actually selling a property for several years (or in the forseeable future) it really is no big deal, and can often save you on Lenders Mortgage insurance, and obviously reduce your LVR. (Margaret Lomas has some very interesting comments on this – that make sense too if you are not planning on doing a ‘buy and sell’.) I must take Richard to task (Sorry, I realise I do not have anywhere near his experience – I am not critisising…[exhappy] ) but you may find Wizard (please do not say GE..yes, I know..) are no different to anyone else in that at the end of the day, if a customer demands to do things a certain way, other than give them options, you cannot endorse officially a way of structuring property loans etc as it encroaches on giving financial advice.) If I can give you an example, I have been with the non bnak lender in question for a while now, and one of my first ‘big’ loan applications was for a client that involved a larger amount, and wanted to refinance his PPOR to finance purchase of another residence, to use for his business, after some renos. I listened to what he was trying to achieve, explained that he would perhaps be better off paying a bit of LMI and keeping both loans sperate, and owning one of the properties outright, even though in my gut I know I could have possibly ‘signed him up’ there and then crossing both properties, but did not. And do you know what? lo and behold even after allowing for a bit of travel to get there after hours, scrubbing one of my mag wheels on his gutter, (should have taken the Daewoo instead of the Ghia dammit) and explaining things as clearly as possible, he went with his bank (CBA) who strongly recommended cross collatoralising the properties, and his accountant also pressured him to do it this way. The only reason I mention that is to show that the old adage of ‘you can lead a horse to water but can’t make it drink; does apply sometimes with the borrower and their accountant, rahter than the lender. Cost me some time and money, and taught me another lesson in the school of life…….And as far as ‘no doc’ goes, Wizard do a ‘Lodoc’ investment loan at 70% LVR that simply requires a declaration of affordability – no income dec involved. All the best with your journey. Take care.[strum]